2. Partners O, R, P, and Q who share profits and losses at 30%, 30%, 20%, and 20%, respectively. decided to liquidate. All partnership assets are to be converted into cash. Before liquidation, the condensed balance sheet follows: Cash Other Assets P 100,000 1,800,000 Liabilities R, Loan Q, Loan O, Capital R, Capital P, Capital Q, Capital P 750,000 60,000 50,000 420,000 315,000 205,000 100,000 P 1,900,000 Total P 1,900,000 The non-cash assets realized P800,000, resulting to a loss of P1,000,000. All the partners are solvent, and can contribute any additional cash to cover any deficiency. In the process of liquidation. who among the partners will incur deficiencies will occur and will require additional investment? Show your supporting computation.
2. Partners O, R, P, and Q who share profits and losses at 30%, 30%, 20%, and 20%, respectively. decided to liquidate. All partnership assets are to be converted into cash. Before liquidation, the condensed balance sheet follows: Cash Other Assets P 100,000 1,800,000 Liabilities R, Loan Q, Loan O, Capital R, Capital P, Capital Q, Capital P 750,000 60,000 50,000 420,000 315,000 205,000 100,000 P 1,900,000 Total P 1,900,000 The non-cash assets realized P800,000, resulting to a loss of P1,000,000. All the partners are solvent, and can contribute any additional cash to cover any deficiency. In the process of liquidation. who among the partners will incur deficiencies will occur and will require additional investment? Show your supporting computation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise on Partnership Liquidation
Transcribed Image Text:Exercise 4-3
2. Partners O, R, P, and Q who share profits and losses at 30%, 30 %, 20%, and 20%, respectively.
decided to liquidate. All partnership assets are to be converted into cash. Before liquidation, the
condensed balance sheet follows:
Cash
Other Assets
P 100,000
1,800,000
Liabilities
R, Loan
Q, Loan
O, Capital
R, Capital
P, Capital
Q, Capital
P 750,000
60,000
50,000
420,000
315,000
205,000
100,000
P 1,900,000
Total
P 1,900,000
The non-cash assets realized P800,000, resulting to a loss of P1,000,000. All the partners are
solvent, and can contribute any additional cash to cover any deficiency. In the process of liquidation.
who among the partners will incur deficiencies will occur and will require additional
investment? Show your supporting computation.
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