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 $ 67,000 Liabilities $ 41,000 Noncash assets 267,000 Frick, capital (60%) 159,000 Wilson, capital (20%) 43,000 Clarke, capital (20%) 91,000 Total assets $ 334,000 Total liabilities and capital $ 334,000

Part A

Prepare the predistribution plan for this partnership

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 $9,000 are estimated as a basis for this computation.
2. Sold noncash assets with a book value of $110,000 for $67,000.
3. Paid all liabilities.
4. Distributed cash based on safe capital balances again.
5. Sold remaining noncash assets for $59,000.
6. Paid actual liquidation expenses of $7,000 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.

Part C

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