Answered: Determine the amount realized from the…

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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On December 31, 2021, the GAR Partnership of Garry, Aubrey and Rolly have the following accounts and balances: Garry, Capital(50%), P297,000; Aubrey, Capital (30%), P222,000; Rolly Capital (20%), P195,000; Loans Payable-Aubrey, P72,000; Accounts Receivable-Garry, P36,000; Rolly, Drawing, P36,000. Because of unsuccessful operation for the last 2 years, the partners decided to liquidate after closing the books on December 31, 2021. On this date, the total assets amounted to P1,056,000 including cash of P321,000. During the liquidation process, all the non-cash assets were taken by its competitor. Liabilities were settled, liquidation expenses of P15,000 were paid and the balance was distributed to the partners. Ultimately, Rolly received P125,000 in the final settlement. 9.Determine the amount realized from the sale of non-cash assets. 10.Determine the amount received by Aubrey as return on her capital.

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.

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