The partnership of Etan, Kazuo, & Cole has experienced operating losses for three consecutive years. The partners-who have shared profits and losses in the ratio of Etan, 10%; Kazuo, 70%; and Cole, 20%-are liquidating the business. They ask you to analyze the effects of liquidation. They present the following condensed partnership balance sheet at December 31, 2016:
1. Assume the non-cash assets are sold for $165,000. Journalize the liquidation transactions.
2. Assume the non-cash assets are sold for $80,000. Journalize the liquidation transactions.