Problem 2

A, B, C and D are winding down their partnership and have elected to sell off all assets and to distribute any available cash. If any partner has a negative capital account then they can only be responsible for repayment to the extent that they have personal assets. The balance sheet as of December 31, 2019 is as follows.

Cash 40,000

Other Assets 410,000

Total Assets 450.000

Accounts Payable 109,000

A, Capital (30%) 111,000

B, Capital (10%) 113,000

C, Capital (40%) 78,000

D, Capital (10%) 39,000

Total Liabilities& Capital 450,000

The personal assets and liabilities of each partner are as follows

Personal Assets Personal Liabilities

A, Capital 176,000 144,000

B, Capital 80,000 102,000

C, Capital 217,000 176,000

D, Capital 54,000 77,000

1. The Partnership sold all of the assets for $180,000
2. All of the creditors were paid
3. Partners settled with partnership
4. Cash was distributed to partners

REQUIRED: Prepare entries to record above.