solve E12-9

E12-8 Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 60% and 40%, respectively.

E12-9 Data for Sedgwick Company are presented in E12-8. Sedgwick Company now decides to liquidate the partnership.

Instructions

Prepare the entries to record:

(a) The sale of noncash assets.

(b) The allocation of the gain or loss on realization to the partners. (c) Payment of creditors.

(d) Distribution of cash to the partners.