Reference no: EM132675502

Bold and Victory decide to liquidate their partnership business.

Their capital balances were $40,000 each, and they share income and losses in the ratio of 3:1, respectively. On the date of liquidation, the following balances were recorded in the books of the firm:

Cash $50,000
Noncash assets $90,000
Accounts payable $60,000
The noncash assets are sold for $34,000 and all liabilities duly paid off.
Liquidation expenses amounted to $4,000.
Both partners are personally solvent.

Required:

Problem 1: Prepare all the liquidation entries necessary to close the books of accounts.