Please explain it properly [The following information applies to the questions displayed below.)The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partnershave reached retirement age, and the partners have decided to terminate operations and liquidate the business.Liquidation expenses of $35,000 are expected. The partnership balance sheet at the start of liquidation is as follows:$ 171, 000$ 31, 00061, 00051, 000115, 000105, 000$ 363, 000CashLiabilitiesButler, loanButler, capital (25%)Osman, capital (25%)Ward, capital (50%)Total liabilities and capitalAccounts receivableOffice equipment (net)Building (net)31, 00055, 00031, 00075, 000LandTotal assets$ 363, 000The following transactions transpire in chronological order during the liquidation of the partnership:1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.2. Sold the office equipment for $20,500, the building for $82,000, and the land for $124,000.3. Distributed safe payments of cash.4. Paid all liabilities in full.5. Paid actual liquidation expenses of $30,500 only.6. Made final cash distributions to the partners.Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journalentry required" in the first account field.)

Partnership means where two or more person comes together to do some common business activity and…

(The following information applies to the questions displayed below.) The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $35,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) $ 31, 000 61, 000 51, 000 115, 000 105, 000 $ 363, 000 $ 171, 000 31, 000 55, 000 31, 000 75, 000 $ 363, 000 Liabilities Butler, loan Butler, capital (25%) Osman, capital (25%) Ward, capital (50%) Land Total assets Total liabilities and capital following transactions transpire in chronological order during the liquidation of the partnership: Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. sold the office equipment for $20,500, the building for $82,000, and the land for $124,000. Distributed safe payments of cash. aid all liabilities in full. Paid actual liquidation expenses of $30,500 only. Made final cash distributions to the partners. pare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal -y required" in the first account field.)

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter23: Accounting For Partnerships

Section: Chapter Questions

Problem 3AP