Prepare all journal entries necessary to account for the transactions of the partnership during January 2012.

Prepare all journal entries necessary to account for the transactions of the partnership during January 2012.

Liquidation—Journal entries

After closing entries were made on December 31, 2011, the ledger of Mac, Nan, and Obe contained the following balances:

Cash $39,000 Accounts Payable $5,000

Inventory $16,000 Mac capital (40%) $15,000

Nan capital (30%) 8,000

Obe capital (30%) 27,000

Due to unsuccessful operations, the partners decide to liquidate the business. During January some of the inventory is sold at cost for $10,000, and on January 31, 2012, all available cash is distributed. It is not known if the remaining inventory items can be sold.

Required: Prepare all journal entries necessary to account for the transactions of the partnership during January 2012.


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