The partnership of Frick, Wilson, and Clarke has elected to ceae all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:

Cash......................................................................$60,000

Noncash assets......................................................$219,000

Total assets...........................................................,$279,000

Liabilities................................................................$40,000

Frick, capital (60%).................................................$129,000

Wilson, capital (20%)..............................................$35,000

Clarke, capital (20%)..............................................$75,000

Total liabilities and capital.......................................$279,000

Part A Prepare a 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 $8,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $94,000 for $60,000. 3. Paid all liabilities. 4. Distributed cash based on safe capital balances again. 5. Sold remaining noncash assets for $51,000. 6. Paid actual liquidation expenses of $6,000 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.

Please fill out Template Given:

Cash NonCash Assets Liabilities Frick, Capital (60%) Wison, Capital (20%) Clarke, Capital (20%)

Beginning Balances $60,000 $219,000 $40,000 $129,000 $35,000 $75,000

Distribution of $4,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with pre-distribution plan

Updated balances

Noncash assets sold

Updated balances

All liabilities are paid

Updated balances

Distribution of $48,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with pre-distribution plan

First distribution

Next

Next

Updated balances

Noncash assets sold

Updated balances

Paid liquidation expenses

Updated balances

Final distribution based on ending capital account balances

Ending balances