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The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash Noncash assets $ 60,000 207,000 Liabilities Frick, capital (608) Wilson, capital (208) Clarke, capital (20%) Total liabilities and capital $ 43,000 120,000 33,000 71,000 $267,000 Total assets $267,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: 1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $90,000 for $60,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $49,000. 6. Paid actual liquidation expenses of $8,000 only. 7. Distributed remaining cash to the partners and closed the financial records of the business permanently. Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. (If no entry is requ transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 6 7 > Record the entry for initial cash payments made to partners in accordance with predistribution plan. Note: Enter debits before credits. Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. (Do not round intermediate calculations.) FRICK, WILSON, AND CLARKE Statement of Partnership Liquidation Final Balances Noncash Cash Wilson, Clarke, Frick, Capital Liabilities Assets (60%) Capital Capital (20%) (20%) Beginning balances $ 60,000 $ 207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Distribution Updated balances $ 60,000 $ 207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Noncash assets sold Updated balances $ 60,000 $207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Liabilities paid Updated balances $ 60,000 $ 207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 First (remainder of first distribution) Next Next Updated balances $ 60,000 $ 207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Noncash assets sold Updated balances $ 60,000 $207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Liquidation expenses paid Updated balances $ 60,000 $207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Final distribution based on ending capital account balances Ending balance $ 60,000 $ 207,000 $ 43,000 $ 120,000 $ 33,000 $ 71,000 Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list X > anding 1 Record the entry for initial cash payments made to partners in accordance with predistribution plan. 2 Record the allocation of losses to partners on sale of noncash assets. 3 Record the extinguishment of all partnership liabilities. 4 Record the entry for cash payments made to partners in accordance with predistribution plan. Credit 5 Record the allocation of losses to partners on sale of remaining noncash assets. 6 Record the payment of liquidation expenses. Note : journal entry has been entered 5 Record the allocation of losses to partners on sale of remaining noncash assets. Credit 6 Record the payment of liquidation expenses. 7 Record the entry for final cash payments made to partners based on ending capital balances. Note: - Journal entry has been entered Record entry Clear entry View general Journal
