180,000 Receivable from B 10,000 Inventory 160,000 Equipment 310,000 Total 700,000 Accrued liabilities 250,000 Payable to A 20,000 A, Capital (60%) 240,000 B, Capital (40%) 190,000 Total 700,000
Use the following information for the next two questions:
Farewell
|
Cash |
40,000 |
|
Accounts receivable |
180,000 |
|
Receivable from B |
10,000 |
|
Inventory |
160,000 |
|
Equipment |
310,000 |
|
Total |
700,000 |
|
Accrued liabilities |
250,000 |
|
Payable to A |
20,000 |
|
A, Capital (60%) |
240,000 |
|
B, Capital (40%) |
190,000 |
|
Total |
700,000 |
Case #1: Lump-sum liquidation
Information on the conversion of non-cash assets is as follows:
- Only 60% of the accounts receivable was collected; the balance is uncollectible.
- ₱50,000 was received for the entire inventory.
- The equipment was sold at its carrying amount.
- ₱10,000 Liquidation expenses were paid.
Requirement: Determine the amounts of cash distributed to the partners in the final settlement of their capital accounts.
Case #2: Installment liquidation
Information on the first conversion of non-cash assets is as follows:
- Half of the accounts receivable was collected.
- Inventory costing ₱60,000 was sold for ₱20,000.
- Equipment with carrying amount of ₱200,000 was sold for ₱120,000.
- ₱10,000 liquidation expenses were paid.
- The partners estimate additional liquidation costs of ₱5,000.
- Both partners are personally insolvent.
Requirement: Determine the amounts of cash distributed to the partners from the partial realization of partnership assets.
Please include the solutions on how did you compute the answer. because I can't really understand it, please help me understand it. thank you so much
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