Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 29

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.

Required
Prepare journal entries for ( a ) the sale of inventory, ( b ) the allocation of its gain or loss, ( c ) the payment of liabilities at book value, and ( d ) the distribution of cash in each of the following separate cases: Inventory is sold for (1) $600,000; (2) $500,000; (3) $320,000 and any partners with capital deficits pay in the amount of their deficits; and (4) $250,000 and the partners have no assets other than those invested in the partnership. (Round to the nearest dollar.)