PARTNERSHIP Liquidation

Thomas, Mitchell and Blake partnership decided to liquidate its operation rather than sell the business because they are each about to retire and want to go their separate ways. They have been sharing profits in the ratio of 40% to Thomas, 40% to Mitchell and 20% to Blake. The trial balance for their business on Jan 1, 2012

Trial Balance

January 1, 2016

Cash	42,000
Accounts Receivable	189,600
Allowance for Uncollectible Accounts		11,100
Merchandise Inventory	293,100
Prepaid insurance	9,000
Land	120,000
Office Equipment	31,500
Accumulated Depreciation- Office Equip		10,500
Machinery	81,600
Accumulated Depreciation- Machinery		32,100
Building	375,000
Accum Depreciation- Building		112,500
Notes payable		120,000
Accounts payable		220,500
Mortgage payable		240,000
Thomas, Capital		135,000
Mitchell capital		60,000
Blake Capital		200,100
Totals:	1,141,800	1,141,800

In January 2012, the events took place during the process of liquidating the partnership:

Jan. 6 Accounts receivable of 151,500 are collected, and the allowance for uncollectible accounts is written off the books.

9 Merchandise inventory is sold for 160,500

11 A refund on the prepaid insurance is expected totaling 3,000

14 Property and Equipment were sold to ABC Company for 111,000. The mortgage on the building was also transferred to ABC

20 The remaining creditors were paid full

20 The deficit in Mitchells capital account was absorbed by Thomas and Blake

20 The deficit in Thomas capital account was absorbed by Blake

24 The remaining partnership cash is distributed to Blake.

Required: Prepare the journal entries to record the transactions. Allocate any gain or loss on realization to the partners capital accounts at the time of the transaction. It is to assume that any partner with a capital deficiency is insolvent and will not be able to contribute any personal assets to cover it.