A. After several years of operations, the partnership of Arenas, Dulay and Laurente is to be liquidated. After making the closing entries on June 30, 2018, the following accounts remained open: Account Title Debit Credit Cash 50,000 Non-cash Assets 2,350,000 Liabilities 400,000 Arenas, Capital 900,000 Dulay, Capital 500,000 Laurente, Capital 600,000 The non-cash assets are sold for P2,650,000. Profits and losses are shared equally. Prepare a Statement of Partnership Liquidation and the entries to record the following: 1. Sale of all non-cash assets 2. Distribution of gain on realization to the partners 3. Payment of the liabilities 4. Distribution of cash to the partners

A. After several years of operations, the partnership of Arenas, Dulay and Laurente is to be liquidated. After making the closing entries on June 30, 2018, the following accounts remained open: Account Title Debit Credit Cash 50,000 Non-cash Assets 2,350,000 Liabilities 400,000 Arenas, Capital 900,000 Dulay, Capital 500,000 Laurente, Capital 600,000 The non-cash assets are sold for P2,650,000. Profits and losses are shared equally. Prepare a Statement of Partnership Liquidation and the entries to record the following: 1. Sale of all non-cash assets 2. Distribution of gain on realization to the partners 3. Payment of the liabilities 4. Distribution of cash to the partners

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 January 1, 20x1, the partners of ABC Co. decided to liquidate their partnership. The following information was made available: Cash Accounts receivable Inventory Equipment Total Accounts payable A, Capital (20%) B, Capital (30%) C, Capital (50%) Total 80,000 240,000 480,000 1,200,000 2,000,000 600,000 200,000 400,000 800,000 2,000,000 The net proceeds from the sale of non-cash assets amounted to P260,000. The personal assets and personal liabilities of the partners are as follows: A с B Personal assets 1,200,000 1,040,000 800,000 Personal liabilities (880,000) (880,000) (1,280,000) How much additional contributions shall be made by the partners in order to settle all of the partnership liabilities?
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.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
Item Nos. 13 and 14 are based on the following information: The following are the assets and liabilities of Tee, Pak, and Long partnership on April 30, 200B prior to liquidation: Cash P 25,000 Liabilities. P 52,000 Other Assets 180,000 40,000 Tee Capital (40%) Pak Capital (40%) 65,000 Long Capital (20%) 48,000 P 205,000 P 205,000 The first sale of noncash assets having a carrying amount of P 90,000 realized P 50,000. 13. The amount of cash each partner should receive in the first installment is: a. Tee, P 0; Pak, P 0; Long, P 23,000. b. Tee, P O; Pak, P 5,000; Long, P 18,000. c. Tee, P 12,000; Pak, P 13,000; Long, P 18,000. C. d. Tee, P 27,000; Pak, P 5,000; Long, P 18,000. 14. If P 3,000 cash is withheld for future liquidation expenses, how much cash should Long receive? a. P 21,000. c. P 17,000. b. P 20,000. d. P 3,000.
As of December 31, 2020, the books of Abad, Sison, and Dario Partnership showed capital balances of Abad- 80,000; Sison - 50000 and Dario - 10,000. The partners’ profit and loss ratio was 3:2:1 respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for 74,000. After settlement of all liabilities amounting to 34,000, they still have 56,000 cash left for distribution. How much is the loss on realization?
RR, SS, and TT decided to dissolve the partnership on November 30, 2015. Their capital balances and profit ratio on this date, follow: Capital Bal. P & L RR P 50,000 40% 60,000 20,000 30% TT 30% The net income from January 1 to November 30, 2015 is P 44,000. Also, on this date, cash and liabilities are P 40,000 and P 90,000 respectively. For RR to receive P 55,200 in full settlement of his interest in the firm, how much must be realized from the sale of the firm's non-cash assets? а. Р 196,000 b. Р 177,000 P 193,000 d. P 187,000
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?
The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000
27. On December 31, 2020, the partnership of Abe, Bravo, Charlie and Delfin decided to liquidate with the following account balances. Cash-20,000; Noncash asset- 180,000; Liabilities-100,000; Bravo loan-10,000; Charlie Loan- 5,000; Abe(10%)-15,000; Bravo (20%)- 25,000; Charlie (45%)- 15,000; Delfin(25%)- 30,000 . Assuming that Bravo and Charlie are limited partners and Abe, Bravo, Charlie and Delfin are solvent up to P10,000; P15,000; P10,000 and P5,000 respectively; determine the cash settlement given to Abe if the Non cash assets were sold for P100,000 (round to nearest peso).
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 41,000 229,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $46,500 21,000 77,500 67,500 57,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $79,000 are sold for $62,500. How is the available cash to be divided?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 37,000 Liabilities $ 49,000 Noncash assets 209,000 Drysdale, loan 12,500 Drysdale, capital (50%) 71,500 Koufax, capital (30%) 61,500 Marichal, capital (20%) 51,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?
On January 1, 20x20. ACJ Partnership entered into liquidation. The partners' capital balances on this date were as follows: A (25%) P2,500,000; C (35%) P5,400,0003; J (40%) P3.700,000. The partnership has liabilities amounting to P4,400,000, including a loan from C P600.000. Cash on hand before the start of liquidation is P800,000. Noncash assets amounting to P7,400,000 were sold at book value and the rest of the noncash assets were sold al a loss of P4.200,000. How much cash will be distributed to the partners?