P12-3C The partners in Pawnee Company decide to liquidate the firm when the balance sheet shows the following. Prepare entries and schedule of cash payments in liquidation of a partnership (SO 5) GLS PAWNEE COMPANY Balance Sheet April 30, 2012 Assets Liabilities and Owners' Equity Cash $28,000 Notes payable $16,000 Accounts receivable 19,000 Accounts payable 24,000 Allowance for doubtful accounts (1,000) Salaries and Wages Inventory 28,000 payable 2,000 Equipment 17,000 Neeley, capital 23,000 Accumulated depreciation-equipment (10,000) Hannah, capital 11,200 Total $81,000 Doonan, capital 4,800 Total $81,000 The partners share income and loss 5:3:2. During the process of liquidation, the transactions be- low were completed in the following sequence. 1. A total of $43,000 was received from converting noncash assets into cash. 2. Liabilities were paid in full. 3. Cash was paid to the partners with credit balances. Instructions (a) Prepare a cash distribution schedule. (b) Prepare the entries to record the transactions. (c) Post to the cash and capital accounts. (a) Loss on realization $10,000 Cash paid: to Neeley $18,000; to Doonan $2,800