Homework Help is Here – Start Your Trial Now!
Business
Accounting
Al and Tantay are partners sharing profits equally. The condensed balance sheet of their partnership prior to liquidation is shown 5.1 below: Liabilities and Equity P 1,900 Accounts Payable P 27,200 15,000 5,000 Assets Cash Accounts Receivable 7,200 Al Capital Merchandise Inventory 16,400 Tantay Capital Equipment P 47,200 They decided to liquidate and the assets realized the following 21,700 P 47,200 amounts in cash: P 4,200 11,200 16,000 Accounts Receivable Merchandise Equipment REQUIRED: Prepare working paper for the Statement of Liquidation using the lump sum liquidation method and give all the corresponding journal entries assuming: a. Any capital deficiency is collectible. b. Any capital deficiency is uncollectible.

Al and Tantay are partners sharing profits equally. The condensed balance sheet of their partnership prior to liquidation is shown 5.1 below: Liabilities and Equity P 1,900 Accounts Payable P 27,200 15,000 5,000 Assets Cash Accounts Receivable 7,200 Al Capital Merchandise Inventory 16,400 Tantay Capital Equipment P 47,200 They decided to liquidate and the assets realized the following 21,700 P 47,200 amounts in cash: P 4,200 11,200 16,000 Accounts Receivable Merchandise Equipment REQUIRED: Prepare working paper for the Statement of Liquidation using the lump sum liquidation method and give all the corresponding journal entries assuming: a. Any capital deficiency is collectible. b. Any capital deficiency is uncollectible.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
100%
Partnership Liquidation Chapter 5 PROBLEMS 5.1 Al and Tantay are partners sharing profits equally. The condensed balance sheet of their partnership prior to liquidation is shown below: Liabilities and Equity Accounts Payable P 27,200 15,000 5,000 Assets Р 1,900 7,200 Cash Accounts Receivable Al Capital Merchandise Inventory 16,400 Tantay Capital Equipment 21,700 P 47,200 They decided to liquidate and the assets realized the following P 47,200 amounts in cash: P 4,200 Accounts Receivable Merchandise 11,200 16,000 Equipment REQUIRED: Prepare working paper for the Statement of Liquidation using the lump sum liquidation method and give all the corresponding journal entries assuming: a. Any capital deficiency is collectible. b. Any capital deficiency is uncollectible. 5.2 The general ledger of the partnership of Hall and Fame shows the following balance sheet accounts before liquidation: P 166,800 Non-cash Assets P 82,840 10,000 12,000 48,500 13,460 P 166,800 The non-cash assets were sold for P 92,000. Any capital deficiency is uncollectible. The partners share profits in the ratio of Liabilities Hall Loan Fame Loan Hall Capital Fame Capital P 166,800 8:2 for Hall and Fame, respectively. REQUIRED: Prepare the working paper for the Statement of Liquidation and give all the entries required. 165
Transcribed Image Text:Partnership Liquidation Chapter 5 PROBLEMS 5.1 Al and Tantay are partners sharing profits equally. The condensed balance sheet of their partnership prior to liquidation is shown below: Liabilities and Equity Accounts Payable P 27,200 15,000 5,000 Assets Р 1,900 7,200 Cash Accounts Receivable Al Capital Merchandise Inventory 16,400 Tantay Capital Equipment 21,700 P 47,200 They decided to liquidate and the assets realized the following P 47,200 amounts in cash: P 4,200 Accounts Receivable Merchandise 11,200 16,000 Equipment REQUIRED: Prepare working paper for the Statement of Liquidation using the lump sum liquidation method and give all the corresponding journal entries assuming: a. Any capital deficiency is collectible. b. Any capital deficiency is uncollectible. 5.2 The general ledger of the partnership of Hall and Fame shows the following balance sheet accounts before liquidation: P 166,800 Non-cash Assets P 82,840 10,000 12,000 48,500 13,460 P 166,800 The non-cash assets were sold for P 92,000. Any capital deficiency is uncollectible. The partners share profits in the ratio of Liabilities Hall Loan Fame Loan Hall Capital Fame Capital P 166,800 8:2 for Hall and Fame, respectively. REQUIRED: Prepare the working paper for the Statement of Liquidation and give all the entries required. 165
Partnership Liquidation Chapter 5 5.3 Barbara and Streisand are partners sharing profits and losses in the ratio of 55% and 45%. Barbara's capital investment is P 18,000 and Streisand's is P 14,000. It is decided by the partners that the business should be terminated. The firm has liabilities of P 28,800. Barbara has a loan to the firm in the amount of P 3,600 while Streisand's loan is P 2,400. After realization, the cash on hand amounts to P 30,000. Any deficient partner is insolvent. REQUIRED: Working paper for the Statement of Liquidation and journal entries. A, B, C, and D are partners sharing earnings in the ratio of 3/21, 4/21, 6/21, and 8/21, respectively. The balances of their capital 5.4 accounts on December 31, 200B are as follows: 30,000 750,000 750,000 270,000 P 1,800,000 The partners decided to liquidate. They converted the non- cash assets into P 696,000 of cash. After paying the liabilities amounting to P 90,000, they had P 666,000 to divide. Assume that A B C D Total any capital deficiency is uncollectible. REQUIRED: Show how the P 666,000 will be distributed. Partners W, X, Y, and Z share profits 5:3:1:1, respectively. They decided to liquidate. Capital balances at this time were P 70,000, P 40,000, P 30,000, and P 10,000, respectively. The partners agreed that merchandise costing P 10,000 is to be taken over by W at a price of P 20,000. After selling the remaining assets, liabilities of P 20,000 are to be paid and the balance of cash of P 40,000 is to be divided among the partners. 5.5 REQUIRED: Show how the cash is to be distributed and give all the journal entries required. 166
Transcribed Image Text:Partnership Liquidation Chapter 5 5.3 Barbara and Streisand are partners sharing profits and losses in the ratio of 55% and 45%. Barbara's capital investment is P 18,000 and Streisand's is P 14,000. It is decided by the partners that the business should be terminated. The firm has liabilities of P 28,800. Barbara has a loan to the firm in the amount of P 3,600 while Streisand's loan is P 2,400. After realization, the cash on hand amounts to P 30,000. Any deficient partner is insolvent. REQUIRED: Working paper for the Statement of Liquidation and journal entries. A, B, C, and D are partners sharing earnings in the ratio of 3/21, 4/21, 6/21, and 8/21, respectively. The balances of their capital 5.4 accounts on December 31, 200B are as follows: 30,000 750,000 750,000 270,000 P 1,800,000 The partners decided to liquidate. They converted the non- cash assets into P 696,000 of cash. After paying the liabilities amounting to P 90,000, they had P 666,000 to divide. Assume that A B C D Total any capital deficiency is uncollectible. REQUIRED: Show how the P 666,000 will be distributed. Partners W, X, Y, and Z share profits 5:3:1:1, respectively. They decided to liquidate. Capital balances at this time were P 70,000, P 40,000, P 30,000, and P 10,000, respectively. The partners agreed that merchandise costing P 10,000 is to be taken over by W at a price of P 20,000. After selling the remaining assets, liabilities of P 20,000 are to be paid and the balance of cash of P 40,000 is to be divided among the partners. 5.5 REQUIRED: Show how the cash is to be distributed and give all the journal entries required. 166
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 6 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Partnership Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS