Hope and appreciate if someone would answer this problem for me.
On Jan 31, 2010, the partners Valdemor, Nathan and Patrick authorized the liquidation of their partnership. The statement of financial position is as follows:
Valdemor, Nathan and Patrick
Statement of Financial Position
January 31, 2010
Assets Liabilities and Partners Capital
Cash $ 10,000 Accounts Payable-Trade $ 90,000
Loan Receivable - Nathan 50,000 Loan Payable-Valdemor 60,000
Other Assets (Net) 240,000 Valdemor, Capital 140,000
Nathan, Capital (70,000)
Patrick 80,000
Total Assets $ 300,000 Total Liabilities and Partners Capital % 300,000
Additional Info:
a. The partner's profit and loss sharing ratio was Valdemor 40%, Nathan 40% and Patrick 20%.
b. On Feb. 1, non-cash assets with a book value of $180,000 realized $140,000, and all available cash was paid to creditors and to partners.
c. On Feb. 4, non-cash assets with a book value of $60,000 realized $50,000, and that amount was paid to partners.
d. On Feb. 5, Nathan who was almost insolvent, paid $30,000 on th loan from the partnership. Valdemor and Patrick agreed that the partnership would receive no more cash from Nathan, and they instructed the accountant to close the partnership's accounting records.
Requirement:
1. Prepare the cash priority program
2. Prepare the journal entries.