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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

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 $ 71,000 Liabilities $ 39,000
Noncash assets 291,000 Frick, capital (60%) 177,000
Wilson, capital (20%) 47,000
Clarke, capital (20%) 99,000
Total assets $ 362,000 Total liabilities and capital $ 362,000

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 $118,000 for $71,000.
  3. Paid all liabilities.
  4. Distributed cash based on safe capital balances again.
  5. Sold remaining noncash assets for $63,000.
  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.

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