Adv accounting unit 8

For this assignment, use your Fundamentals of Advanced Accounting text to complete the following:

· Problem 31 on page 513. For this problem you will apply your knowledge of liquidating a partnership to the preparation of the final schedule of liquidation.

Review the Partnership Liquidation Schedule Scoring Guide to ensure you complete all grading criteria.

The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:

Part A

Prepare a predistribution plan for this partnership

Part B

The following transactions occur in liquidating this business:

1. Distributed cash based on safe capital balances immediately to the partners. Liquidation expenses of $8,000 are estimated as a basis for this computation.

2. Sold noncash assets with a book value of $94,000 for $60,000.

3. Paid all liabilities.

4. Distributed cash based on safe capital balances again.

5. Sold remaining noncash assets for $51,000.

6. Paid actual liquidation expenses of $6,000 only.

7. Distributed remaining cash to the partners and closed the financial records of the business permanently.

Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners based on safe capital balances.

Part C

Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.