Required C

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.)

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.

5) Record the allocation of losses to partners on sale of remaining noncash assets.

6) Record the payment of liquidation expenses.

7) Record the entry for final cash payments made to partners based on ending capital balances.

Problem 15-31 (LO 15-1,15-2,15-5) 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 $ 65,000 Liabilities $ 42,000 141,000 38,000 81,000 $302,000 237,000 Frick, Wilson, Clarke, capital (60%) capital capital (20%) (20%) Total assets $302,000 Total liabilities and capital Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this business 1. Distributed cash based on safe capital balances immediately to the partners. Liquidation expenses of $8,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $100,000 for $65,000 3. Paid all liabilities 4. Distributed cash based on safe capital balances again. 5. Sold remaining noncash assets for $54,000 6. Paid actual liquidation expenses of $6,000 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 based on safe capital balances Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation