Answered: Calculate the amount of cash withheld…

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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Question

A balance sheet for the QRS Partnership, which shares profits and losses in the ratio of 5:3:2 shows the following balances just before liquidation: Cash, P30,000; Other assets, P148,750; Liabilities, P50,000; Q, Capital, P55,000; R, Capital, P38,750; and S Capital, P35,000. On the first month of liquidation, certain assets are sold for P80,000. Liquidation expenses of P2,500 is paid, and additional expenses are anticipated. Liabilities are paid amounting to P13,500, and sufficient cash is retained to ensure payment to creditors before making payment to partners. On the payments to partners, Q receives P15,625. Calculate the amount of cash withheld for anticipated liquidation expenses.

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