On November 1, 2014, the firm of Sails, Welch, and Greenberg decided to liquidate their partnership. The partners have capital balances of $58,000, $72,000, and $10,000, respectively. The cash balance is $32,000, the book values of noncash assets total $128,000, and liabilities total $20,000. The partners share income and losses in the ratio of 2:2:1.

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

a. Journalize the entry to allocate the partner's deficiency. For a compound transaction, if an amount box does not require an entry, leave it blank.

ACCOUNT	DEBIT	CREDIT
Sails, Capital
Welch, Capital
Greenberg, Capital

b. Journalize the entry to distribute the remaining cash. For a compound transaction, if an amount box does not require an entry, leave it blank.

ACCOUNT	DEBIT	CREDIT
Sails, Capital
Welch, Capital
Cash