18 Aug Question: 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: Cash $ 66,000 Liabilities $ 46,000 Noncash Assets 231,000 Frick, Capital (60%) 135,000 Wilson, Capital (20%) 37,000 Clarke, Capital (20%) 79,000 Total Assets …
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:
| Cash | $ | 66,000 | Liabilities | $ | 46,000 | |
| Noncash assets | 231,000 | Frick, capital (60%) | 135,000 | |||
| Wilson, capital (20%) | 37,000 | |||||
| Clarke, capital (20%) | 79,000 | |||||
| Total assets | $ | 297,000 | Total liabilities and capital | $ | 297,000 | |
Part A
Prepare a predistribution plan for this partnership
Part B
The following transactions occur in liquidating this business:
- Distributed cash based on safe capital balances immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation.
- Sold noncash assets with a book value of $98,000 for $66,000.
- Paid all liabilities.
- Distributed cash based on safe capital balances again.
- Sold remaining noncash assets for $53,000.
- Paid actual liquidation expenses of $8,000 only.
- Distributed remaining cash to the partners and closed the financial records
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