Question
The partners of the SVA Partnership agreed to liquidate their partnership on December 31, 2023. At that point, the accounting records showed the following balances:
The partners of the SVA Partnership agreed to liquidate their partnership on December 31, 2023. At that point, the accounting records showed the following balances:
Account Debit Credit
Cash $29,000
Notes Payable $15,000
Accounts Receivable 21,000
Accounts Payable 30,000
Allowance for Doubtful Accounts 2,000
Wages Payable 4,000
Merchandise Inventory 36,000
Sharlene, Capital 25,000
Equipment 18,000
Vahideh, Capital 20,000
Accumulated Depreciation-Equipment 7,000
Arafin, Capital 1,000
Total $104,000 $104,000
The partners share profits and losses in a 6:3:1 ratio for Sharlene, Vahideh, and Arafin, respectively.
During the process of liquidation, the following transactions were completed in the below sequence:
1. A total of $50,000 cash was received from selling the non-cash assets.
2. Any gain or loss from the sale was allocated to the partners.
3. All liabilities were paid in full.
4. Arafin paid his capital deficiency.
5. The remaining cash was paid to the partners.
Instructions:
Prepare the journal entries to record the above transactions related to the liquidation of the partnership.
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