**Part I**

The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $47,000 are expected. The partnership balance sheet at the start of liquidation is as follows

Cash	$	43,000		Liabilities	$	183,000
Accounts receivable		73,000		Butler, loan		43,000
Office equipment (net)		63,000		Butler, capital (25%)		115,000
Building (net)		175,000		Osman, capital (25%)		43,000
Land		165,000		Ward, capital (50%)		135,000
Total assets	$	519,000		Total liabilities and capital	$	519,000

1) Prepare a predistribution plan for this partnership.

**Part II**

The following transactions transpire in chronological order during the liquidation of the partnership:

1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.

2. Sold the office equipment for $26,500, the building for $130,000, and the land for $172,000.

3. Made safe capital distributions.

4. Paid all liabilities in full.

5. Paid actual liquidation expenses of $36,500 only.

6. Made final cash distributions to the partners.

1.) Prepare journal entries to record these liquidation transactions.