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. AssetsLiabilities & CapitalP5,000 Accounts Payable100,000 Loan Payable - CokePepsi, CapitalCoke, CapitalP 105,000 Total Liabilities & CapitalP 15,00010,00060,00020,000P 105,000CashOther AssetsTotal AssetsOn Sept. 23, 2021, non-cash assets with a carrying amount of P 70,000 realized P60,000, and P64,000 was paid to creditorsand partners, P 1,000 being retained to cover possible liquidation costs. On Oct. 1, 2021, the remaining non-cash assets realizedP 18,000 (net of liquidation costs), and all available cash was distributed to partners Pepsi and Coke share profits and losses40% and 60%, respectively.

Remaining cash will paid to partners as per their capital balance, unless there is cash deficiency.

Answered: Assets Liabilities & Capital P 5,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

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.

Assets
Liabilities & Capital
P5,000 Accounts Payable
100,000 Loan Payable - Coke
Pepsi, Capital
Coke, Capital
P 105,000 Total Liabilities & Capital
P 15,000
10,000
60,000
20,000
P 105,000
Cash
Other Assets
Total Assets
On Sept. 23, 2021, non-cash assets with a carrying amount of P 70,000 realized P60,000, and P64,000 was paid to creditors
and partners, P 1,000 being retained to cover possible liquidation costs. On Oct. 1, 2021, the remaining non-cash assets realized
P 18,000 (net of liquidation costs), and all available cash was distributed to partners Pepsi and Coke share profits and losses
40% and 60%, respectively.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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