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

	Frick, Capital	Wilson, Capital	Clarke, Capital
Beginning balances
Loss
Step one balances	0	0	0
Loss
Step two balances	0	0	0
Loss
Final balances	0	0	0

Part B

The following transactions occur in liquidating this business:

1. Distributed cash based on safe capital balances immediately 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. Paid all liabilities.

4. Distributed cash based on safe capital balances again.

5. Sold remaining noncash assets for $64,000.

6. Paid actual liquidation expenses of $8,000 only.

7. 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 based on safe capital balances.

FRICK, WILSON, AND CLARKE
Statement of Partnership Liquidation
Final Balances
	Cash	Noncash Assets	Liabilities	Frick, Capital (60%)	Wilson, Capital (20%)	Clarke, Capital (20%)
Beginning balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Distribution
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Noncash assets sold
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Liabilities paid
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
First (remainder of first distribution)
Next
Next
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Noncash assets sold
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Liquidation expenses paid
Updated balances	$70,000	$297,000	$38,000	$180,000	$48,000	$101,000
Final distribution based on ending capital account balances
Ending balance	$70,000	$297,000	$38,000	$180,000	$48,000	$101,00

Part C

Prepare the above 7 journal entries to record the liquidation transactions reflected in the final statement of liquidation.