Bench, Mark, Spencer, and Lee are partners, sharing earnings in the ratio of 3:4:6:8, respectively. The balances of their capital accounts on December 31, 2019 are as follows: Bench – P 1,000 Mark – P 25,000 Spencer – P 25,000 Lee – P 9,000 The partners decide to liquidate, and they accordingly convert the non-cash assets into P 23,200 of cash. After paying the liabilities amounting to P 3,000, they have P 22,200 cash to divide. Assume that a debit balance of any partners’ capital is uncollectible. How much is the cash balance before realization? How much is the share of Bench in the loss upon conversion of the non-cash assets into cash?
Bench, Mark, Spencer, and Lee are partners, sharing earnings in the ratio of 3:4:6:8, respectively. The balances of their capital accounts on December 31, 2019 are as follows: Bench – P 1,000 Mark – P 25,000 Spencer – P 25,000 Lee – P 9,000 The partners decide to liquidate, and they accordingly convert the non-cash assets into P 23,200 of cash. After paying the liabilities amounting to P 3,000, they have P 22,200 cash to divide. Assume that a debit balance of any partners’ capital is uncollectible. How much is the cash balance before realization? How much is the share of Bench in the loss upon conversion of the non-cash assets into cash?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Bench, Mark, Spencer, and Lee are partners, sharing earnings in the ratio of 3:4:6:8, respectively. The balances of their capital accounts on December 31, 2019 are as follows:
Bench – P 1,000 Mark – P 25,000 Spencer – P 25,000 Lee – P 9,000
The partners decide to liquidate, and they accordingly convert the non-cash assets into P 23,200 of cash. After paying the liabilities amounting to P 3,000, they have P 22,200 cash to divide. Assume that a debit balance of any partners’ capital is uncollectible. |
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How much is the cash balance before realization? |
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How much is the share of Bench in the loss upon conversion of the non-cash assets into cash? |
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