Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively. wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 48,000 150,000 118,000 $316,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order:

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively. wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 48,000 150,000 118,000 $316,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets Liabilities Alex, capital Bess, capital $ 200,000 Total liabilities and capital $ 50,000 150,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $30,000 of the partnership's liabilities. c. Sold noncash assets for $160,000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $10,000. f. Paid $4,000 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 40,000 90,000 70,000 $ 200,000 Part B: Prepare a final…
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John and Joseph were in business for several years, sharing profits and losses equally. Because of Jose’s poor health, they decided to liquidate the partnership. John managed the liquidation because Joseph was in the hospital. Just before liquidation, the partnership balance sheet contained the following information: Cash P 800,000 Liabilities P 500,000 Other Assets P 2,200,000 John, Capital P 1,000,000 Joseph, Capital P 1,500,000 Total Assets P 3,000,000 Total Liabilities & Equity P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divided the remaining cash between them, according to their profit and loss sharing ratio. Joseph received a note from John that read “Good news – sold other…
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