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.