Problem
Company wishes to liquidate the firm by distributing the company's cash to the three partners. Prior to the distribution of cash, the company's balances are Cash $65,300; Oakley, Capital (Cr.) $52,000; Quaney, Capital (Dr.) $22,680; and Ellis, Capital (Cr.) $35,980. The income ratios of the three partners are 2 : 4 : 4, respectively.
Prepare the entry to record the absorption of Quaney's capital deficiency by the other partners and the distribution of cash to the partners with credit balances.