UESTION #2 (20 points)

Mo, Larry, and Curley are partners that share profits and ratios by a 4:3:3 ratio. They have decided to liquidate the partnership. Mo has a capital balance of $40,000, Larry has a capital balance of $30,000, and Curley has a capital balance of $10,000. Accounts payable are $14,000. Assets are cash of $37,000 and non-cash assets of $57,000. The non-cash assets were sold for $97,000.

Prepare entries to record the sale of the non-cash assets:

Debit Credit

Pay the liabilities:

Debit Credit

Distribute the remaining cash to the partners:

Debit Credit