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After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts...

After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,520, $4,080, and $22,180, respectively. Cash and noncash assets total $4,880 and $55,940, respectively. Amounts owed to creditors total $15,040. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $36,020, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid. Required: 1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for items (a) - (d), the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0". 2. Assume that the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Feb. 28 to (a) allocate the partner’s deficiency and (b) distribute the remaining cash. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

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When a partner become insolvent due to bankruptcy following entry is passed:

Solvent Partners Accounts Dr

Insolvent Partner Account

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