Reference no: EM13169517

March, April, and May have been in partnership for a number of years. The partners allocateall profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personallyinsolvent and, thus, the partners have decided to liquidate the business in hopes of remedyingtheir personal financial problems. As of September 1, the partnership's balance sheet is asfollows:

Cash. . . . . . . . . . . . . . . . . . $ 11,000            Liabilities . . . . . . . . . . . . . . . . . . . $ 61,000

Accounts receivable . . . . . . 84,000           March, capital . . . . . . . . . . . . . . . 25,000

Inventory . . . . . . . . . . . . . . 74,000             April, capital . . . . . . . . . . . . . . . . 75,000

Land, building, and                                          May, capital . . . . . . . . . . . . . . . . . 46,000

Equipment (net) . . . . . . . . 38,000              Total liabilities and capital . . . . . $207,000

Total assets . . . . . . . . . . . $207,000

Prepare journal entries for the following transactions:

a. Sold all inventory for $56,000 cash.

b. Paid $7,500 in liquidation expenses.

c. Paid $40,000 of the partnership's liabilities.

d. Collected $45,000 of the accounts receivable.

e. Distributed safe cash balances; the partners anticipate no further liquidation expenses.

f. Sold remaining accounts receivable for 30 percent of face value.

g. Sold land, building, and equipment for $17,000.

h. Paid all remaining liabilities of the partnership.

i. Distributed cash held by the business to the partners.