Data for Sedgwick Company are presented, Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt 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 realization to the partners.

(c)Payment of creditors.

(d)Distribution of cash to the partners.