6 Problem 10-21 (LO 10-2, 10-4) Alex and Bess have been in partnership for many

Question

6 Problem 10-21 (LO 10-2, 10-4) Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectvely, ish to rotre and have agreed to liquidate the business. Liquldation expenses are estimated to be $5,000. Ar the date the ceases operations, the balanco sheet is as Solows: sse,eee ebilitles 15e,eee Alex, copital Bess, capital 98,889 Total assets s 269,900 Total 1abilitles and capital art A: Prepare journal entries for the following transactions Presare youmse emtres ton a Distibined safe cash paymonts to the partners. b Paid $30,000 of the partnership's ltabilities C Sold noncash assets for S 60.000 d. Distributed ssfe cash payments to the partners g Discributed remaining cosh helo by the business to the certners Pert B: Prepare a fina stenoment of pannershipIquidetion Complete this question by entering your answers in the tabs below. re ounral atries for cha foling

Explanation / Answer

Amount in $ Date General Journal Debit Credit Bess Capital 5000 Cash 5000 To record the distribution of safe cash to partners b Liabilities 30000 Cash 30000 To record the payment of laibilities c Cash 160000 Non-cash asset 150000 profit on sale of assets 10000 Profit on sale of assets 10000 Alex Capital 6000 Bess Capital 4000 To record the receipts from sale of non cash assets d Alex Capital 93000 Bess Capital 67000 Cash 160000 To record the distribution of safe cash to partners e Liabilities 10000 Cash 10000 To record the payment of laibilities f Liquidation expenses 4000 Cash 4000 Alex Capital 2400 Bess Capital 1600 Liquidation expenses 4000 To record the payment for liquidation expenses g Alex Capital 600 Bess Capital 400 Cash 1000 To record the payment of remaining cash to partners Alex & Bess Partnership Statement of partnership liquidation Cash Non-Cash asset Liabilities Alex Capital Bess Capital Beginning balances 50000 150000 40000 90000 70000 Distribution to partners -5000 0 -5000 Paid liabilities -30000 -30000 Sold non cash assets 160000 -150000 6000 4000 Updated balances 175000 0 10000 96000 69000 Distribution to partners -160000 -93000 -67000 Paid liabilities -10000 -10000 Paid liquidation expenses -4000 -2400 -1600 Updated balances 1000 0 0 600 400 Distribution to partners -1000 -600 -400 Closing Balances 0 0 0 0 0 Statement of safe payments to partners 1st Safe payments Alex Bess Ratio 60% 40% Capital 90000 70000 Loss on asset 90000 60000 Other losses 3000 2000 Sub-total -3000 8000 Assume Alex loss 3000 -3000 Safe payments 0 5000 2nd Safe Payments Alex Bess Ratio 60% 40% Updated Balance Capital 96000 69000 Other losses -3000 -2000 Sub-total 93000 67000 Safe payments 93000 67000

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