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"be balance sheet of the Omar Paolo and Ouek partnershin on November 1 2016 (bet

"be balance sheet of the Omar Paolo and Ouek partnershin on November 1 2016 (bet

FINANCIAL ACCOUNTING
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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Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: 58,000 60,000 8,000 14,000 70,000 Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) 34,000 62,000 24,000 26,000 64,000 Cash P Inventory Loan to Omar Loan to Quek Plant assets-net Total assets 210,000 Total liab./equity 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions • All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. • No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio • Partner's right to offset is allowed. Required: 4. Problem 2 - How much cash will go to the first rank creditors? 5. Problem 2 - How much cash will be given to Omar upon liquidation? 6. Problem 2 - How much cash will be given to Paolo upon liquidation? 7. Problem 2 - How much cash will be given to Quek upon liquidation?
Transcribed Image Text:Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: 58,000 60,000 8,000 14,000 70,000 Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) 34,000 62,000 24,000 26,000 64,000 Cash P Inventory Loan to Omar Loan to Quek Plant assets-net Total assets 210,000 Total liab./equity 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions • All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. • No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio • Partner's right to offset is allowed. Required: 4. Problem 2 - How much cash will go to the first rank creditors? 5. Problem 2 - How much cash will be given to Omar upon liquidation? 6. Problem 2 - How much cash will be given to Paolo upon liquidation? 7. Problem 2 - How much cash will be given to Quek upon liquidation?
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