On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $46,000, $65,000, and $10,000, respectively. The cash balance is $14,000, the book values of no cash assets total $141,000, and liabilities total $34,000. The partners share income and losses in the ratio of 2:2:1. 1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following assumptions:

a. All of the no cash assets are sold for $189,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign.

cash+noncash assets=liabilities+capital chapelle(2/5)+capital rock (2/5)+capital Pryor (1/5)

balances before realization

sale of assets and division of gain

balances after realization

payment of liabilities

balances after payment of liabilities

cash distributed to partners

final balances

b. All of the non cash assets are sold for $60,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign.

cash+noncash assets=liabilities+capital chapelle(2/5)+capital rock (2/5)+capital Pryor (1/5)

balances before realization

sale if assets and division of loss

balance after realization

payment of liabilities

balances after payment of liabilities

receipt of deficiency

balances

cash distributed to partners

final balance

2. Assume the partner with the capital deficiency in part (b) declares bankruptcy and is unable to pay the deficiency

a. Journalists the entry to allocate the partners deficiency. 1. Cash, chapelle drawing, Pryor capital, Pryor, drawing, rock drawing, rock capital

2. cash, Pryor capital, Pryor drawing, chapelle capital, rock drawing

3. cash, Pryor capital, Pryor drawing, Rock capital, chapelle capital

b. Journal is the entry to distribute the remaining cash

1. cash, chapelle drawing, Pryor capital, Pryor drawing, rock drawing, chapelle capital

2. cash, Pryor capital, Pryor drawing, rock capital, rock drawing

3. cash, Pryor capital, Pryor drawing, rock capital, chapelle capital