The Red, White & Blue partnership was begun with investments by the partners as follows: Red, $175,000; White, $220,000; and Blue, $205,000. The operations did not go well, and the partners eventually decided to liquidate the partnership, sharing all losses equally. On August 31, after all assets were converted to cash and all creditors were paid, only $60,000 in partnership cash remained.
1. Compute the capital account balance of each partner after the liquidation of assets and the payment of creditors. (Negative amounts should be indicated with a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)
2. Assume that any partner with a deficit agrees to pay cash to the partnership to cover the deficit.
(a) Prepare the journal entry on August 31 to record the cash receipt from the deficient partner. (Omit the "tiny_mce_markerquot; sign in your response.)
(b) Prepare the journal entry on August 31 to record the final disbursement of cash to the partners. (Omit the "tiny_mce_markerquot; sign in your response.)
3. Assume that any partner with a deficit is not able to reimburse the partnership.
(a) Present journal entry to transfer the deficit of any deficient partners to the other partners. (Omit the "tiny_mce_markerquot; sign in your response.)
(b) Present journal entry to record the final disbursement of cash to the partners. (Omit the "tiny_mce_markerquot; sign in your response.)