Accounting Principles: P12-3A The partners in New Yorker Company

Accounting Principles
P12-3A
The partners in New Yorker Company decide to liquidate the firm when the balance sheet shows the following.
NEW YORKER COMPANY
Balance Sheet
May 31, 2010
Assets Liabilities and Owners' Equity
Cash 27,500 Notes payable 13,500
Accounts receivable 25,000 Accounts payable 27,000
Allowance for doubtful accounts (1,000) Wages payable 4,000
Merchandise inventory 34,500 M. Mantle, Capital 33,000
Equipment 21,000 W. Mays, Capital 21,000
Accumulated depreciation-equipment (5,500) D. Snider, Capital 3,000
Total 101,500 Total 101,500

The partners share income and loss 5 : 3 : 2. During the process of liquidation, the following transactions were completed in the following sequence.
1. A total of $55,000 was received from converting noncash assets into cash.
2. Gain or loss on realization was allocated to partners.
3. Liabilities were paid in full.
4. D. Snider paid his capital deficiency.
5. Cash was paid to the partners with credit balances.

Requirements:
a. Prepare the entries to record the transactions. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
b. Assume that Snider is unable to pay the capital deficiency.(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
1. Prepare the entry to allocate Snider's debit balance to Mantle and Mays.
2. Prepare the entry to record the final distribution of cash.
c. Post to the cash and capital accounts.
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