Reference no: EM132469281

Problem 1: The partnership of Gagnon, Ruddy, and Featro plans to dissolve the business which they've operated for a number of years. Gagnon, Ruddy, and Featro share profits or losses 50%, 30%, and 20%, respectively. Following are the accounts and their balances per partnership prior to liquidation: Cash $7,000 Accounts Receivable 22,500 Merchandise Inventory 27,200 Office Equipment 9,800 Accumulated Depreciation- Office Equipment 1,300 Accounts Payable 12,900 Gagnon, Capital 17,700 Ruddy, Capital 15,500 Featro, Capital 19,100 Additional data: a. Merchandise inventory was sold for $24,000. b. Accounts receivable were sold for $19,200. c. Office equipment was sold for $9,200. Gains or losses should be reflected in an account titled "Gain or Loss from Realization."

Question 1: What the journal entry to record the payment in full of all liabilities and the partners' capital claims is

option A. Gagnon, Capital 14,800 Ruddy,

Capital 13,760 Featro,

Capital 17,940 Accounts Payable 12,900 Cash 33,600

option B. Gagnon, Capital 14,800 Ruddy,

Capital 13,760 Featro,

Capital 17,940 Accounts Payable 12,900 Cash 59,400

option C. Gagnon, Capital 17,700 Ruddy,

Capital 15,500 Featro,

Capital 19,100 Accounts Payable 12,900 Gain or Loss on Sale of Assets 5,800 Cash 59,400

option D. Gagnon, Capital 17,700 Ruddy,

Capital 15,500 Featro,

Capital 19,100 Accounts Payable 12,900 Gain or Loss on Sale of Assets 4,500 Cash 60,700