The Mago Company at December 31 has cash $50,000, noncash assets $250,000, liabilities $138,000, and the following capital balances: Gonzalez $112,000 and Maldonado $50,000. The firm is liquidated, and $275,000 in cash is received for the noncash assets. Gonzalez and Maldonado income ratios are 60% and 40%, respectively.
Instructions
Prepare the entries to record:
(a) The sale of noncash assets.
(b) The allocation of the gain or loss on liquidation to the partners.
(c) Payment of creditors.
(d) Distribution of cash to the partners.

Question

Quizplus · Accepted Answer

The Answer of The Mago Company at December 31 has cash $50,000, noncash assets $250,000, liabilities $138,000, and the following capital balances: Gonzalez $112,000 and Maldonado $50,000. The firm is liquidated, and $275,000 in cash is received for the noncash assets. Gonzalez and Maldonado income ratios are 60% and 40%, respectively.
Instructions
Prepare the entries to record:
(a) The sale of noncash assets.
(b) The allocation of the gain or loss on liquidation to the partners.
(c) Payment of creditors.
(d) Distribution of cash to the partners.

The Mago Company at December 31 Has Cash $50,000, Noncash