Problem 15-21 (Algo) (LO 15-2, 15-3, 15-5)

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $9,500. At the date the partnership ceases operations, the balance sheet is as follows:

Cash	$	59,000	Liabilities	$	44,500
Noncash assets		180,000	Alex, capital		108,000
			Bess, capital		86,500
Total assets	$	239,000	Total liabilities and capital	$	239,000

Part A: Prepare journal entries for the following transactions that occurred in chronological order:

Distributed safe cash payments to the partners.

Paid $26,700 of the partnerships liabilities.

Sold noncash assets for $194,500.

Distributed safe cash payments to the partners.

Paid remaining partnership liabilities of $17,800.

Paid $7,600 in liquidation expenses; no further expenses will be incurred.

Distributed remaining cash held by the business to the partners.

Requird A

Part B: Prepare a final statement of partnership liquidation.

Prepare journal entries for the following transactions that occurred in chronological order: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Distributed safe cash payments to the partners. b. Paid $26,700 of the partnerships liabilities. c. Sold noncash assets for $194,500. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $17,800. f. Paid $7,600 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners.

1. Record the initial distribution of available cash bases on safe capital balance

2. Record the payment of the partnership's liabilities

3. Record the sale of non cash assets

4. Record the entry to distribute safe cash payments to the partners

5. Record the payment of all remaining partnership liabilities

6. Record the payment of liquidation expense

7. Record the entry to distribute remaining cash held by the business to the partners

Required B

Prepare a final statement of partnership liquidation. (Amounts to be deducted should be entered in minus sign.)

ALEX AND BESS PARTNERSHIP
Statement of Partnership Liquidation
	Cash	Non-cash Assets	Liabilities	Alex, Capital	Bess, Capital
Beginning balances
Distribution to partners
Paid liabilities
Sold noncash assets
Updated balances
Distribution to partners
Updated balances
Paid liabilities
Paid liquidation expenses
Updated balances
Distribution to partners
Closing balances