Part A

The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process:

Cash	$	37,000	Liabilities	$	68,000
Accounts receivable		104,000	Rodgers, loan		57,000
Inventory		123,000	Wingler, capital (30%)		153,000
Land		96,000	Norris, capital (10%)		110,000
Building and equipment (net)		179,000	Rodgers, capital (20%)		85,000
			Guthrie, capital (40%)		66,000
Total assets	$	539,000	Total liabilities and capital	$	539,000

When the liquidation commenced, liquidation expenses of $21,000 were anticipated as being necessary to dispose of all property.

Prepare a predistribution plan for this partnership.

Part B

The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership:

1. Collected 85 percent of the total accounts receivable with the rest judged to be uncollectible.
2. Sold the land, building, and equipment for $161,000.
3. Made safe capital distributions.
4. Learned that Guthrie, who has become personally insolvent, will make no further contributions.
5. Paid all liabilities.
6. Sold all inventory for $78,000.
7. Made safe capital distributions again.
8. Paid actual liquidation expenses of $12,000 only.
9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.

Prepare journal entries to record these liquidation transactions:

1) Record the cash received from accounts receivable and loss allocated to partners

2) Record the cash received from land and buildings and loss allocated to partners

3) Record the entry for the initial distribution of cash as per pre-distribution plan

4) Record Guthrie's insolvency

5) Record the settlement of all liabilities

6) Record the cash received from inventory and loss allocated to partners

7) Record the distribution of cash as per pre-distribution plan

8) Record the cash paid for liquidation expenses

9) Record the remaining cash distributed based on final capital balances

10) Record the distribution of remaining cash based on final capital balances