The three partners of Summer Springs Medical Clinic agree to liquidate their partnership on September 15, 2017. At that point, the accounting records show the following balances:

Cash	$100,000	M. Nokota, capital	$70,000
Supplies	110,000	S. Taishuh, capital	30,000
Accounts payable	90,000	A. Paso, capital	20,000

The three partners share profit and loss 50%, 25%, and 25%, for Nokota, Taishuh, and Paso, respectively.

Instructions

(a) Journalize the liquidation of the partnership on September 30 under each of the following independent assumptions:

• 1.The supplies are sold for $130,000 cash, the liabilities are paid, and the remaining cash is paid to the partners.
• 2.The supplies are sold for $25,000 cash and the liabilities are paid. Assume that any partners with a debit capital balance pay the amount owed to the partnership.

(b)

Refer to item 2 in part (a) above. Assume instead that any partners with a debit capital balance are unable to pay the amount owed to the partnership. Journalize the reallocation of the deficiency and final distribution of cash to the remaining partners.