Question: The partners of the RichMax Corporation decide to liquidate the firm on DEC 3.
RichMax Corporation Balance Sheet as on 3/31/08
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Assets
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Liabilities and Owners Equity
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|
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Cash
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$30,000
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Notes Payable
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$17,000
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Accounts Receivable
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33,000
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Accounts Payable
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24,000
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|
Allowance for Doubtful A/C
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(2,000)
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Wages Payable
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2,000
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Merchandise Inventory
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24,000
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Rich, Capital
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22,000
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Equipment
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10,000
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Max, Capital
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21,000
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Accumulated Depreciation, Eqt
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(8,000)
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Rudy, Capital
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1,000
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Total
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$87,000
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Total
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$87,000
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Partners share income & loss in the ratio 1:2:3. During the process of liquidation, the following transactions were finished.
[A] A total of $42,000 was received from the sale of all of the non-cash assets.
[B] Liabilities fully paid.
[C] Rudy was unable to pay his capital deficiency.
[D] The final cash distribution was made to partners.
Make journal entries to record the liquidation.