John, Jake, and Joe are partners with capital accounts of $90,000, $78,000, and $64,000 respectively. They share profits and losses in the ratio of 30:40:30. When the partners decide to liquidate, the business has $70,000 in cash, noncash assets totaling $260,000, and $98,000 in liabilities. The noncash assets are sold for $270,000, and the creditors are paid.
Required:
A. Prepare a schedule of partnership liquidation.
B. Prepare journal entries to record each of the following transactions.
(1) The sale of the noncash assets.
(2) The payment to the creditors.
(3) The distribution of cash to the partners.