Question

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Complete the following questions by preparing worksheet and journal entries given below.

The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $46,000 are expected. The partnership balance sheet at the start of liquidation is as follows:

Cash	$	42,000		Liabilities	$	182,000
Accounts receivable		72,000		Butler, loan		42,000
Office equipment (net)		62,000		Butler, capital (25%)		110,000
Building (net)		170,000		Osman, capital (25%)		42,000
Land		160,000		Ward, capital (50%)		130,000
Total assets	$	506,000		Total liabilities and capital	$	506,000

rev: 10_29_2019_QC_CS-188028

The following transactions transpire in chronological order during the liquidation of the partnership:

1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.

2. Sold the office equipment for $26,000, the building for $126,000, and the land for $168,000.

3. Made safe capital distributions.

4. Paid all liabilities in full.

5. Paid actual liquidation expenses of $36,000 only.

6. Made final cash distributions to the partners.

Answer 1