The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash Accounts receivable Inventory $ 27,000 94,000 113,000 Liabilities Rodgers, loan Wingler, capital (30%) Land 91,000 Norris, capital (10%) Building and equipment (net) 174,000 Rodgers, capital (20%) Guthrie, capital (40%) Total assets $499,000 Total liabilities and capital $ 67,000 47,000 138,000 100,000 80,000 67,000 $499,000 When the liquidation commenced, liquidation expenses of $14,000 were anticipated as being necessary to dispose of all property. Part A Prepare a predistribution plan for this partnership. Part B The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: 1. Collected 80 percent of the total accounts receivable with the rest judged to be uncollectible. 2. Sold the land, building, and equipment for $156,000. 3. Distributed safe payments of cash. 4. Learned that Guthrie, who has become personally insolvent, will make no further contributions. 5. Paid all liabilities. 6. Sold all inventory for $81,000. 7. Distributed safe payments of cash again. 8. Paid actual liquidation expenses of $11,000 only. 9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent. Prepare journal entries to record these liquidation transactions. 1 No Transaction 01 Cash Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital Accounts receivable 2 02 Cash 0 Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital Land Building and equipment 3 03 Wingler, Capital Norris, Capital 4 04 Rodgers, Capital Rodgers, Loan Cash No journal entry required General Journal Debit 75,200 Credit 5,640 1,880 3,760 7,520 94,000 156,000 32,700 10,900 21,800 43,600 91,000 174,000 53,160 x 0 0 0 177,200 9 9.a Wingler, Capital 0 Norris, Capital Rodgers, Capital 1,500 X 0 Guthrie, Capital 9,000 10 9.b Wingler, Capital 1,500 Norris, Capital 500 Rodgers, Capital 1,000 Cash 3,000