Question 6 Sedgwick Company at December 31 has cash $22,738, noncash assets $102

Question

Question 6

Sedgwick Company at December 31 has cash $22,738, noncash assets $102,100, liabilities $54,390, and the following capital balances: Floyd $46,620 and DeWitt $23,828. The firm is liquidated, and $116,900 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 65% and 35%, respectively.

Prepare the entries to record: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

(c)

(d)

(a) The sale of noncash assets. (b) The allocation of the gain or loss on realization to the partners. (c) Payment of creditors. (d) Distribution of cash to the partners.

Explanation / Answer

1.

b)

c)

d)

Cash A/c Debit $116,900 Non cash assets a/c Credit $102,100 Gain on realisation a/c Credit $14,800

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