After years of operations, the partnership of De Vera, Dela Cruz, De Jesus is to be liquidated. After making the closing entries on February 28, 2022, the following accounts were left: Account Debit Credit 50,000 2,350,000 Cash Non-cash Assets Liabilities De Vera, Capital Dela Cruz, Capital De Jesus, Capital 400,000 900,000 500,000 600,000 All the non-cash assets were sold for P2,650,000. Profits and losses are shared equally. Required: a. Prepare the statement of partnership liquidation b. Prepare the journal entries for the following: Sale of all non-cash assets and distribution of loss on realization to the partners • Payment of liabilities Distribution of cash to the partners

After years of operations, the partnership of De Vera, Dela Cruz, De Jesus is to be liquidated. After making the closing entries on February 28, 2022, the following accounts were left: Account Debit Credit 50,000 2,350,000 Cash Non-cash Assets Liabilities De Vera, Capital Dela Cruz, Capital De Jesus, Capital 400,000 900,000 500,000 600,000 All the non-cash assets were sold for P2,650,000. Profits and losses are shared equally. Required: a. Prepare the statement of partnership liquidation b. Prepare the journal entries for the following: Sale of all non-cash assets and distribution of loss on realization to the partners • Payment of liabilities 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 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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