Question
Someone please help The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn
Someone please help
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 | $ | 70,000 | Liabilities | $ | 38,000 | |
Noncash assets | 297,000 | Frick, capital (60%) | 180,000 | |||
Wilson, capital (20%) | 48,000 | |||||
Clarke, capital (20%) | 101,000 | |||||
Total assets | $ | 367,000 | Total liabilities and capital | $ | 367,000 | |
Part A
Prepare a predistribution plan for this partnership.
Part B
The following transactions occur in liquidating this business:
- Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation.
- Sold noncash assets with a book value of $120,000 for $70,000.
- Paid all liabilities.
- Distributed safe payments of cash again.
- Sold remaining noncash assets for $64,000.
- Paid actual liquidation expenses of $8,000 only.
- 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.
Part C
Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and IIquidate its business property. A balance sheet drawn up at this time shows the following account balances: Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur In IIquidating this business: 1. Distributed safe payments of cash Immedlately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $120,000 for $70,000. 3. Pald all llabilltles. 4. Distrlbuted safe payments of cash again. 5. Sold remaining noncash assets for $64,000. 6. Pald actual liquidation expenses of $8,000 only. 7. Distributed remaining cash to the partners and closed the financlal records of the business permanently. Produce a final statement of IIquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entrles to record the IIquidation transactions reflected in the final statement of IIquidation. Prepare a predistribution plan for this partnership. Complete this question by entering your answers in the tabs below. Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. (Do not intermediate calculations.) Complete this question by entering your answers in the tabs below. 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.) Journal entry worksheet 4567 Record the entry for initial cash payments made to partners in accordance with predistribution plan. Note: Enter debits before credits. 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. Note : = journal entry has been enteredStep by Step Solution
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