The partnership of Butler, Osman, and Ward was formed several years 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 $34,000 are expected. The partnership balance sheet at the start of liquidation is as follows:

Prepare a predistribution plan for this partnership.

Part B

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 $23,500, the building for $106,000, and the land for $148,000.

3. Made safe capital distributions.

4. Paid all liabilities in full.

5. Paid actual liquidation expenses of $33,500 only.

6. Made final cash distributions to the partners.

Prepare journal entries to record these liquidation transactions.

Cash . Accounts receivable.. $ 30,000 60,000 50,000 $170,000 30,000 50,000 30,000 70,000 Liabilities.. Office equipment (net) Building (net) . Land...... Butler, loan. Butler, capital (25%) Osman, capital (25%) Ward, capital (50%). . Total liabilities and capital.. 110,000 100,000 Total assets $350,000 $350,000