Reference no: EM132973985

March, April , and May have been in partnership for a number of years. The partners allocate all profits and losses on a 3:3:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems.

As of September 1, the partnership balance sheet is as follows:

Cash: $22,000
Accounts receivable: $106,000
Inventory: $85,000
Land, Building, and Equip: $49,000
Total Assets: $262,000

Liabilities: $83,000
March, capital: $36,000
April, capital: $86,000
May, Capital: $57,000
Total liabilities and capital: $262,000

Problem 1: Prepare journal entries for the following transactions:

a. Sold all inventory for $67,000
b. Paid $10,800 in liquidation expenses.
c. Paid $51,000 of the partnership's liabilities.
d. Collected $58,000 of the accounts receivable.
e. Distributed safe payments of cash; the partners anticipate no further liquidation expense.
f. Sold remaining accounts receivable for 30 percent of face value.
g. Sold land, building and equipment for $28,000
h. Paid all remaining liabilities of the partnership.
i. Distributed cash held by the business to the partners.