Question

Microsoft Word non-commercial use 3. Jimmy Pesto and Calvin Fischoeder's business goes bankrupt and needs to liquidate. Jimmy and Calvin's income ratios are 60% and 40%, respectively. They sell their noncash assets to their competitor Bob for $105,000. The following is the partnership's Balance Sheet: Jimmy Pesto's Pizzeria Balance Sheet December 31, 20XX Assets Cash $20,000 Accounts Receivable 5,000 Supplies 3,000 Inventory 12,000 Equipment 80,000 Total Assets $120,000 Liabilities and Owners' Equity Accounts Payable $55,000 J. Pesto, Capital 45,000 C. Fischoeder, Capital 20,000 Total Liabilities and Owners' Equity $120,000 Prepare the journal entries to liquidate the business. Account Debit Credit 238110% 9/21

Answer 1

A B с D Date Credit Debit 105000 Account Titles and Explanation Cash Accounts receivable Inventory Supplies Equipment Profit on sale of non cash assets 5000 12000 3000 80000 5000 55,000 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 Accounts payable Cash 55,000 5000 Profit on sale of non cash assets J.P, Capital C.F, Capital 3000 2000 J.P, Capital C.F, Capital Cash 48000 22000 70000

A B C D Date Credit Debit 105000 169 170 171 172 173 174 175 Account Titles and Explanation Cash Accounts receivable Inventory Supplies Equipment Profit on sale of non cash assets 5000 12000 3000 80000 =C171-SUM(D172:D175) 176 177 178 55000 Accounts payable Cash 55000 5000 Profit on sale of non cash assets J.P, Capital C.F, Capital =5000*60% =5000*40% 179 180 181 182 183 184 185 186 187 188 J.P, Capital C.F, Capital Cash =45000+D182 =20000+D183 =20000+105000-55000