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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

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$15,000 Liabilities$74,000

Accounts receivable82,000 Rodgers loan35,000

Inventory101,000 Wingler capital (30%)120,000

Land85,000 Norris capital(10%)88,000

Building and equipment (net)168,000 Rodgers capital (20%)74,000

Guthrie capital (40%)60,000

Total assets451,000 Total liabilities and capital451,000

When the liquidation commenced, expenses of $16,000 were anticipated as being necessary to dispose of all property.

Part A: develop a pre-distribution plan for this partnership.

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 $150,000.

3. Made safe capital distributions.

4. Learned that Guthrie, who has become personally insolvent, will make no further contributions.

5. Paid all liabilities.

6. Sold all inventory for $71,000.

7. Made safe capital distributions again.

8. Paid liquidation expenses of $11,000.

9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.

Part B: Prepare journal entries to record these liquidation transactions.

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