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

Exercise 32

Lasure, Ramirez, and Toney, who share income and loss in a 2:1:2 ratio, plan to liquidate their partnership. At liquidation, their balance sheet appears as follows.

Required
Prepare journal entries for ( a ) the sale of equipment, ( 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: Equipment is sold for (1) $650,000; (2) $530,000; (3) $200,000 and any partners with capital deficits pay in the amount of their deficits; and (4) $150,000 and the partners have no assets other than those invested in the partnership. (Round amounts to the nearest dollar.)