The Balance Sheet of Ryan and Peter Firm as at 30

Multiple Choice

The balance sheet of Ryan and Peter firm as at 30 June 2017 is given below. $\begin{array}{|l|r|l|c|}\hline{\text { Assets }} &&{\text { Liabilities }} & \\\hline \text { Cash } & \$ 15,000 & \text { Accounts payable } & \$ 15,000 \\\hline \text { Accounts receivable } & 12,000 & \text { Other liabilities } & 22,000\\\hline \text { Furmiture } & 23,000 & {\text { Partners' equity }} & \\\hline \text { Equipment } & 39,000 & \text { Ryan, capital } & 30,000 \\\hline \text { Other assets } & \underline{8,000} & \text { Peter, capital } & \underline{30,000} \\\hline \text { Total assets } & \$ 97,000 & \text { Total liabilities and partners' equity } & \$ 97,000\\\hline\end{array}$ Ryan and Peter share profits in the ratio 3:2.They have decided to liquidate the partnership with immediate effect.They sold the furniture and equipment for $72,000.Which of the following is the correct journal entry for the sale transaction?

A) $$\begin{array} { | c | c | c | } \hline \text { Cash } & \$ 72,000 & \\\hline \text { Furniture } & & 23,000 \\\hline \text { Equipment } & & 39,000 \\\hline \text { Gain on } & & \\\text { disposal } & & 10,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | l | l | } \hline \text { Cash } & \$ 62,000 & \\\hline \text { Furniture } & & 23,000 \\\hline \text { Equipment } & & 39,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | c | c | } \hline \text { Liquidation account } & \$ 134,000 & \\\hline \text { Cash } & & 72,000 \\\hline \text { Furniture } & & 23,000 \\\hline \text { Equipment } && 39,000 \\\hline\end{array}$$
D) $$\begin{array} { | c | l | l | } \hline \text { Loss on disposal } & \$ 10,000 & \\\hline \text { Cash } & 72,000 & \\\hline \text { Furniture } & & 23,000 \\\hline \text { Equipment } & & 49,000 \\\hline\end{array}$$