A, B and Care partners decided to liquidate the partnership on December 31, 2019. All partners arepersonally insolvent. The firm's statement of financial position on this date is as follows:AssetsLiabilities and CapitalCash5,430Accounts payable12,892Other assets61,870A, Loan8,000A, Capital(50%)8, Capital(30%)C, Capital(20%)Total liabilities and capital16,4025,46924,537Total assets67,30067,300The following data relate to the realization of other assets:Book valueCash realized Cash withheld Liquidation expensesJanuaryFebruary24,70020,1203,0002,75021,0003,70033,1708001,600March4,000200Requirement: Prepare the statement of liquidation and determine payment to partner for each month.

Statement of liquidation and payments to partner for each month:

Answered: A, B and Care partners decided to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On September 23, 2021 – Pepsi and Coke have both decided to dissolve and liquidate their partnership. The balance sheet/statement of financial position on that date is as follows in the given picture. Required: 1. Prepare the cash priority program. 2. Prepare the liquidation journal entries and the statement of liquidation.
On December 31, 2030, ABC Partnership’s Statement of Financial Positions shows that A, B and C have capital balances of P1,000,000, P600,000 and P400,000 with profit or loss ratio of 1:3:6.On January 1, 2030, C retired from the partnership and received P700,000. At the time of C’s retirement, an asset of the partnership is undervalued. What is the capital balance of A after the retirement of C? a. P925,000b. P1,075,000c. P1,12500d. P1,050,000
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On September 15, 2021, LCM Partnership entered into liquidation. The partners' profit and loss ratios and capital balances on this date were as follows: L 25% 2,500,000.00 C 35% 5,400,000.00 M 40% 3,700,000.00 Total 11,600,000.00 The partnership has liabilities amounting to P 4,400,000, including a loan from C in the amount of P600,000. Cash on hand before starting the liquidation process is P 800,000. Non-cash assets amounting to P 7,400,000 were sold at book value and the remainder of the non-cash assets were sold at a loss of P 4,200,000. How much cash will be distributed to the partners?
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Kim, Nicolas, and Troy are general partners in KNT Partnership sharing profits and losses in the ratio of 2:4:4, respectively. The partnership suffered financial distress and the partners decided to liquidate the partnership in December 2019. Accounts, after revaluation, adjustment, and correction, had the following ledger balances: Cash P 90,000 Accounts Receivable 205,000 Allowance for Doubtful Accounts 5,000 Merchandise Inventory 180,000 Equipment Accumulated Depreciation Equipment Accounts Payable Kim, Loan [Loan Payable - Kim] Troy, Loan [Loan Payable Troy] Kim, Capital Nicolas, Capital Troy, Capital 600,000 102,000 182,000 18,000 90,000 100,000 213,000 365,000 For the independent cases that follow in the course of winding up, prepare a statement of liquidation and necessary journal entries to record the liquidation process: A. The entire net receivable was collected, all inventories were sold at cost, and equipment was sold at its carrying value. B. Only 90% of net receivable was…
On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5. Total Assets 100,000 Total Liabilities 40,000 Lorna 10,000 Amy 20,000 Veronica 30,000 On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit:• During the year, machinery was over depreciated by $15,000.• The net income for the year is overstated by $5,000.After the adjustment, Lorna received $15,000 for her capital interest.How much is the capital of Amy after Lorna’s retirement? A. 27,500 B. 23,000 C. 21,875 D. 20,000
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