On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5:3:2, respectively, decide to liquidate their partnership. The partnership trial balance at this date follows: Cash Accounts Receivable Inventory Machinery and Equipment (net) Accounts Payable Art, Capital Bru, Capital Debit $ 21,000 Credit 73,500 59,500 196,500 $ 56,000 95,500 117,500 Chou, Capital Total $ 350,500 81,500 $ 350,500 The partners plan a program of piecemeal conversion of assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January 20X1 1. Collected $57,000 on accounts receivable; the balance is uncollectible. 2. Received $42,500 for the entire Inventory. 3. Pald $3,500 liquidation expenses. 4. Paid $52,400 to creditors, after offset of a $3,600 credit memorandum received on January 11, 20X1. 5. Retained $13,000 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20X1 6. Paid $5,500 liquidation expenses. 7. Retained $7,500 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. March 20X1 8. Received $153,000 on sale of all Items of machinery and equipment. 9. Paid $6,500 liquidation expenses. 10. Retained no cash in the business. Required: Prepare a statement of partnership liquidation for the partnership with schedules of safe payments to partners. Note: Round your answers to nearest whole dollar. Answer is complete but not entirely correct. ABC PARTNERSHIP Statement of Partnership Realization and Liquidation For the period from January 1, 20X1, through March 31, 20X1 Cash Other Assets Accounts Payable Capital Balances Art Bru Chou 21,000 329,500 58,000 95,500 117,500 81,500 Balances before liquidation, January 1, 20X1 January transactions: Collection of accounts receivable at a loss 57,000 (73,500) (8,250) (4,950) (3,300) Sale of inventory at a loss 42,500 (59,500) (8,500) (5,100) (3,400) Liquidation expenses paid Share of credit memorandum Payments to creditors (3,500) (1,750) (1,050) (700) (3,600) 1,800 1,080 720 (52,400) (52,400) $ 64,600 $ 196,500 $ 0 $ 78,800 $ 107,480 S 74,820 Safe payments to partners 51,600 25,800 x 15.480 10,320 $ 13,000 $ 196,500 $ 0 $ 53,000 S 92,000 $ 64,500 February transactions: Liquidation expenses paid (5.500) 2,750 1,650 1,100 $ 7,500 $ 196,500 $ 0 $ 50,250 S 90,350 $ 63,400 Safe payments to partners March transactions: Sale of Machinery and Equipment at a loss Liquidation expenses paid Payments to partners Balances at end of liquidation, March 31, 20X1 $ 7,500 $ 196,500 S 0 S 50,250 S 90,350 $ 63,400 153,000 (6,500) (196,500) 21,750 13,050 8,700 3,250 1,950 1,300 $ 154,000 $ 0 $ 0 $ 25,250 S 75,350 $ 53.400 (154,000) 77,000 46,200 30,800 $ 0 S 0 19 $ 0 $ (51,750) $ 29.150 $ 22,600 Answer is not complete. ABC PARTNERSHIP Schedule of Safe Payments to Partners Art 50% Bru Chou 30% 20% Schedule 1: January 31, 20X1 Capital balances $ 78,800 $ 107,480 $ 74,820 Potential Losses and Expenses 104,750 62,850 41,900 $ (25,950) $ 44,630 $ 32,920 Allocation of potential deficit Safe payment, January 31, 20X1 Schedule 2: February 27, 20X1 Capital balances Potential Losses and Expenses $ (78,800) $ (80,150) $ (50,550) X 25,950 (17,300) (8,650) $ 0 $ 27,330 $ 24,270 102,000 61,200 40,800 $ $ (180,800) $ (91,350) (141,350) Allocation of potential deficit $ Safe payment, February 27, 20X1 $ (180,800) $ (91,350) (141,350)