Required information [The following information applies to the questions displayed below.] The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $49,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 45,000 75,000 65,000 185,000 175,000 $ 545,000 Liabilities Butler, loan Butler, capital (253) Osman, capital (253) Ward, capital (503) Total liabilities and capital $ 185,000 45,000 125,000 45,000 145,000 $ 545,000 Prepare a predistribution plan for this partnership Butler, Loan and Capital Osman, Capital Ward, Capital Beginning balances Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances $ 0 $ 0 $ $ 0 $ 0 $ 0 The following transactions transpire in chronological order during the liquidation of the partnership: 1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. 2. Sold the office equipment for $27,500, the building for $138,000, and the land for $180,000. 3. Distributed safe payments of cash. 4. Paid all liabilities in full. 5. Paid actual liquidation expenses of $37,500 only. 6. Made final cash distributions to the partners. Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 3 3 45,000 91,000 Butler, loan Butler, capital Osman, capital Ward, capital Cash 11,000 77,000 224,000 6 6 Butler, capital Osman, capital Ward, capital Cash