Account Balance Account Title Debit Credit Cash P 50,000 Non-cash Assets 2,350,000 Liabilities P 400,000 Arenas, Capital 900,00
Account Balance Account Title Debit Credit Cash P 50,000 Non-cash Assets 2,350,000 Liabilities P 400,000 Arenas, Capital 900,00
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 10SPB: STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS After several years of operations, the partnership...
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Problem #1
Lump-Sum liquidation with Gain on Realization
After several years of operations, the partnership of Arenas, Dulay and Laurente is to be liquidated. After
making the closing entries on June 30, 2011, the following accounts remained open:
Account Balance
Account Title Debit Credit
Cash P 50,000
Non-cash Assets 2,350,000
Liabilities P 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.
Required: Prepare a statement of partnership liquidation and 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.
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