Sedgwick Company at December 31 has cash $23,800, noncash assets $106,000, liabi

Question

Sedgwick Company at December 31 has cash $23,800, noncash assets $106,000, liabilities $51,600, and the following capital balances: Floyd $45,000 and is liquidated, and $112,000 in cash is received for the noncash assets. Floyd and Dewitt income ratios are 70% and 30%, respectively. Sedgnick Company now decides to liquidate the partnership Prepare the entries to record: (Credit account titles are automatically iIndented when amount is entered. Do not indent (a) The sale of noncash assets. (b) The allocation of the gain or loss on realization to the partners (c) Payment of creditors. (d) Distribution of cash to the partners. Account Titles and Explanation Debit Credit (b) f

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit a) Cash a/c 112000 Non current assets 106000 Profit on sale 6000 b) Profit on sale 6000 Floyd's capital 4200 Dewitt's capital 1800 c) Liabilities a/c 51600 Cash a/c 51600 d) Floyd's capital 49200 Dewitt's capital 35000 Cash a/c 84200

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