A Partnership Has the Following Balance Sheet at December 31,2018

question 138

Essay

A partnership has the following balance sheet at December 31,2018.Blair and Smith share profits 50:50.
$\begin{array}{|l|l|l|r}\hline \text { Cash } & \$ 9,000 & \text { Accounts Payable } & \$ 50,000 \\\hline \text { Land } & \underline{120,000} &\text { Blair, Capital } & 45,000 \\\hline \text { Total Assets } & \$ 129,000 & \text { Smith, Capital } & \underline{34,000} \\\hline && \text { Total Liabilities and Partners' Equity } & \$ 129,000 \\\hline\end{array}$
The partnership liquidates and sells its land for $100,000.All liabilities are liquidated at book value.
Required:
Prepare the journal entries to liquidate the partnership on December 31,2018.

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Definitions:

Inventory Value

The total cost or market value of all the goods held by a company intended for sale or used in production.

Prime Costs

The combined costs of direct materials and direct labor that are directly involved in the production of a product.

Factory Overhead

Costs related to the manufacturing process that are not directly attributable to the product being manufactured, such as utilities and maintenance of equipment.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, including assets, liabilities, and shareholders' equity.