Response to the following problem:
The balance sheet of A, B, and C Partnership is shown below. The partnership has decided to liquidate. The general ledger shows the following balances on March 1, 2016:
Cash $ 10,000
Other assets 125,000
Accounts payable 10,000
A, capital 25,000
B, capital 37,500
C, capital 62,500
Proceeds from the sale of non-cash assets during March were $42,500.
Required:
1. Prepare a statement of partnership liquidation for the month ending March 31, 2016. Assume profits and losses are shared equally and that any capital deficiency is absorbed by the other partners.
2. Prepare the journal entries to record the dissolution. Dates are not required.