Question

The partners in Crane Company decide to liquidate the firm when the balance sheet shows the following. Assets Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation equipment Crane Company Balance Sheet May 31, 2020 Liabilities and Owners' Equity $29,900 Notes payable $13,000 24,500 Accounts payable 26,800 (1,400) Salaries and wages payable 4,300 34,800 A. Jamison, capital 33,800 21,600 S. Mayer, capital 23,100 (5,700) P. Roper, capital 2,700 $103,700 $103,700 The partners share income and loss 5:3:2. During the process of liquidation, the following transactions were completed in the following sequence. 1. A total of $53,100 was received from converting noncash assets into cash 2. Gain or loss on realization was allocated to partners. 3. Liabilities were paid in full. 4. P. Roper paid his capital deficiency 5. Cash was paid to the partners with credit balances Prepare the entries to record the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit No. Account Titles and Explanation 1. Cash Debit 53,100 1400 Allowance for Doubtful Accounts Accumulated Depreciation-Equipment Loss on Realization Accounts Receivable Inventory Equipment 21.600 2. A. Jamison, Capital S. Moyer, Capital P. Roper, Capital Loss on Realization Notes Payable Accounts Payable Salaries and Wages Payable Cash P. Roper, Capital 5. A. Jamison, Capital S. Moyer, Capital Cash

Answer 1

General Journal

So.No	Account Title and Explanation	Debit	Credit
1	Cash	$53,100
	Allowance for Doubtful Account	$1,400
	Accumulated Depreciation -Equipment	$5,700
	Loss on Realisation *	$20,700
	Accounts Receivable		$24,500
	Inventory		$34,800
	Equipment		$21,600
2	A.Jamison Capital ($20,700 × 5/10)	$10,350
	S.Moyer Capital ($20,700× 3/10)	$6,210
	P.Roper Capital ($20,700×2/10)	$4,140
	Loss on Realization		$20,700
3	Note Payable	$13,000
	Accounts Payable	$26,800
	Salaries & Wages Payable	$4,300
	Cash		$44,100
4	Cash	$1,440
	P.Roper Capital ($4,140 - $2,700)		$1,440
5	A.Jamison Capital ($33,800-$10,350)	$23,450
	S.Moyer Capital ($23,100-$6,210)	$16,890
	Cash		$40,340

Explanation.

*1. Non Cash Asset (net) $ 73,800

less : Sales Proceeds $ 53,100

Loss on sale of non cash asset = $20,700