On November 1, the firm of Sails, Welch, and Greenberg decidedto liquidate their partnership. The partners have capital balancesof $58,200, $72,490, and $9,940, respectively. The cash balance is$31,570, the book values of noncash assets total $128,990, andliabilities total $19,930. The partners share income and losses inthe ratio of 2:2:1.

	Required:
1.	Prepare a statement of partnership liquidation, covering theperiod November 1–30, for each of the following independentassumptions: a. All of the noncash assets are sold for $156,990 in cash, thecreditors are paid, and the remaining cash is distributed to thepartners.* b. All of the noncash assets are sold for $55,890 in cash, thecreditors are paid, the partner with the debit capital balance paysthe amount owed to the firm, and the remaining cash is distributedto the partners.* * Refer to the lists of Labels and Amount Descriptions for theexact wording of the answer choices for text entries. For thoseboxes in which you must enter subtracted or negative numbers(balance deficiencies, payments, cash distributions, divisions ofloss), use a minus sign. If there is no amount to be reported forsale of assets, payment of liabilities, receipt of deficiency, orcash distribution rows, the cell can be left blank. However, in thebalance rows, a balance of zero MUST be indicated by entering"0".
2.	Assume the partner with the capital deficiency in part (b)declares bankruptcy and is unable to pay the deficiency. Journalizethe entries on Nov. 30 to (a) allocate the partner’s deficiency and(b) distribute the remaining cash. Refer to the Chart of Accountsfor exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS
Sails, Welch, and Greenberg
General Ledger
ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Supplies 118 Office Supplies 119 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Equipment 126 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Sails, Capital 311 Sails, Drawing 312 Welch, Capital 313 Welch, Drawing 314 Greenberg, Capital 315 Greenberg, Drawing	REVENUE 410 Revenues 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salary Expense 521 Advertising Expense 522 Depreciation Expense-Building 523 Depreciation Expense-Equipment 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Property Tax Expense 539 Miscellaneous Expense 710 Interest Expense

Labels and Amount Descriptions

Labels
For Period November 1–30
For the Year Ended November 30
Amount Descriptions
Balances after payment of liabilities
Balances after realization
Balances before realization
Capital additions
Cash distributed to partners
Final balances
Less partner withdrawals
Net income for the year
Payment of liabilities
Receipt of deficiency
Sale of assets and division of gain
Sale of assets and division of loss