Comprehensive Problem The ZODIAC Partnership has suffered financially due to poor results of operations for the past three years. Lyon, Virgo, and Aquarius share profits and losses 40%, 20%, and 40%, respectively. Disillusioned by the setback, the partners are considering the liquidation of their partnership. The following condensed partnership statement of financial position as of December 31,2020, the end of the calendar year. ZODIAC Partnership Statement of Financial Position As of 31 December 2020 Liabilities and Partners' Equity Accounts Payable Lyon, Loan Lyon, Capital Virgo, Capital Aquarius, Capital Total Liabilities and Partners' Equity Assets Cash Inventories P 30,000 49,000 20,000 95,000 100,000 106,000 40,000 Fumitures and Fixtures P 300,000 Total Assets P 370,000 P 370,000 Additional information: a. All of the non-cash assets are sold for P40,000. TAS b. Lyon and Virgo are personally solvent while Aquarius is personally insolvent. Required: A. Prepare the statement of liquidation B. Prepare the journal entries related to the liquidation process IUST
Comprehensive Problem The ZODIAC Partnership has suffered financially due to poor results of operations for the past three years. Lyon, Virgo, and Aquarius share profits and losses 40%, 20%, and 40%, respectively. Disillusioned by the setback, the partners are considering the liquidation of their partnership. The following condensed partnership statement of financial position as of December 31,2020, the end of the calendar year. ZODIAC Partnership Statement of Financial Position As of 31 December 2020 Liabilities and Partners' Equity Accounts Payable Lyon, Loan Lyon, Capital Virgo, Capital Aquarius, Capital Total Liabilities and Partners' Equity Assets Cash Inventories P 30,000 49,000 20,000 95,000 100,000 106,000 40,000 Fumitures and Fixtures P 300,000 Total Assets P 370,000 P 370,000 Additional information: a. All of the non-cash assets are sold for P40,000. TAS b. Lyon and Virgo are personally solvent while Aquarius is personally insolvent. Required: A. Prepare the statement of liquidation B. Prepare the journal entries related to the liquidation process IUST
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:II. Comprehensive Problem
The ZODIAC Partnership has suffered financially due to poor results of operations for the past three years. Lyon,
Virgo, and Aquarius share profits and losses 40%, 20%, and 40%, respectively. Disillusioned by the setback, the
partners are considering the liquidation of their partnership. The following condensed partnership statement of
financial position as of December 31,2020, the end of the calendar year.
ZODIAC Partnership
Statement of Financial Position
As of 31 December 2020
Assets
Liabilities and Partners' Equity
Accounts Payable
Lyon, Loan
Lyon, Capital
Virgo, Capital
Aquarius, Capital
Total Liabilities and
Partners' Equity
P 49,000
20,000
95,000
100,000
106,000
Cash
Inventories
P 30,000
40,000
P 300,000
Furnitures and Fixtures
Total Assets
P 370,000
P 370,000
Additional information:
All of the non-cash assets are sold for P40,000. RITAS.
b. Lyon and Virgo are personally solvent while Aquarius is personally insolvent.
а.
Required:
A. Prepare the statement of liquidation
B. Prepare the journal entries related to the liquidation process
Solution Area:
IUSTII
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