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On January $1,20$X$1,$ partners Art, Bru, and Chou, who share profits and losses in the ratio of $6$:$2$:$2,$ respectively, decide to liquidate their partnership. The partnership trial balance at this date follows:

Debit Credit

Cash $ $20,200$

Accounts Receivable $71,500$

Inventory $57,500$

Machinery and Equipment $($net$)194,500$

Accounts Payable $ $55,200$

Art, Capital $93,500$

Bru, Capital $115,500$

Chou, Capital $79,500$

Total $ $343,700$ $ $343,700$

The partners plan a program of piecemeal conversion of assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

January $20$X$1$

Collected $$55,400$ on accounts receivable; the balance is uncollectible.

Received $$41,300$ for the entire inventory.

Paid $$3,100$ liquidation expenses.

Paid $$51,500$ to creditors, after offset of a $$3,700$ credit memorandum received on January $11,20$X$1.$

Retained $$12,200$ cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses.

February $20$X$1$

Paid $$5,100$ liquidation expenses.

Retained $$7,100$ cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses.

March $20$X$1$

Received $$150,600$ on sale of all items of machinery and equipment.

Paid $$6,100$ liquidation expenses.

Retained no cash in the business.

Required:

Prepare a statement of partnership liquidation for the partnership with schedules of safe payments to partners.

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