The partnership of Du, Chong, and Quing has experienced operating losses for three consecutive years. The partners, who have shared profits and losses in the ratio of Jia Du, 10 percent, Denis Chong, 30 percent, and Alan Quing, 60 percent, are considering the liquidation of the business. They ask you to analyze the effects of liquidation under various possibilities about the sale of the noncash assets. They present the following partnership balance-sheet amounts at December 31, 2014:

Required
1. Prepare a summary of liquidation transactions (as illustrated in the chapter) for each of the following situations:
a. The noncash assets are sold for $552,000.
b. The noncash assets are sold for $448,000.
2. Make the journal entries to record the liquidation transactions in Requirement 1(b).

Transcribed Image Text:

Cash Noncash assets $ 70,000 Liabilities $316,000 526,000 Jia Du, capital Denis Chong, capital Alan Quing, capital Total liabilities and capita 102,000 98,000 S596,000 Total assets $596,000 l