Reference no: EM132672457

Problem 1: December 31, 2019 - The business recorded a net loss of $46,000. Mahomes had drawings of $20,834.

Required:

a. Show the entry to allocate the net loss to the partners' capital accounts
b. Prepare a Statement of Partners' Equity for 2019.

Problem 2: January 1, 2020 - The partners decide to liquidate the partnership. They have the following balances:

Cash $12,000,

Accounts Receivable $8,166,

Equipment $110,000,

Accumulated Depreciation $25,000,

Accounts Payable $11,000

The partners were able to collect $3,500 of the accounts receivable and sell the equipment for $52,000.

Required:

a. Show the entry to sell off the assets.
b. Show the entry to allocate the loss on sale to the partners.
c. Show the entry to pay off the business liabilities.
d. Show the entry to dissolve the partnership, allocating cash to the partners.