6465D, E and F are partners in DEF Partnership with profit or loss sharing ratio of 6:1:3. Due to disagreement, the partners decided to liquidate their business with pre-liquidation statement of financial position presented below: Cash P 3,000,000 Liabilities P10,000,000 Noncash assets 17,000,000 D, Capital 1,000,000 E, Capital 4,000,000 F, Capital 5,000,000 The following additional notes are provided: All partners are legally declared to be personally insolvent. All noncash assets are sold during the liquidation process. Liquidation expenses amounting to P2,000,000 were paid. E receives a total of P2,500,000 at the end of liquidation. 1. What is the amount received by F at the end of liquidation? 2. How much is the net proceeds from the sale of all noncash assets?

Liquidation: The term liquidation refers to closing or ending the business by selling the assets and…

Answered: D, E and F are partners in DEF…

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

6465

D, E and F are partners in DEF Partnership with profit or loss sharing ratio of 6:1:3. Due to disagreement, the partners decided to liquidate their business with pre-liquidation statement of financial position presented below:

Cash	P 3,000,000	Liabilities	P10,000,000
Noncash assets	17,000,000	D, Capital	1,000,000
		E, Capital	4,000,000
		F, Capital	5,000,000

The following additional notes are provided:

All partners are legally declared to be personally insolvent.
All noncash assets are sold during the liquidation process.
Liquidation expenses amounting to P2,000,000 were paid.

E receives a total of P2,500,000 at the end of liquidation.

1. What is the amount received by F at the end of liquidation?

2. How much is the net proceeds from the sale of all noncash assets?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution