Problem #12Final Cash Distribution to PartnersThe partnership of Sarabia, Selisana and Gevera is about to be liquidated. All the assetshave been sold for cash and the creditors have been fully paid. The capital accounts ofthe partners have the following balances at the date of liquidation:P600,000 credit240,000 debit360,000 creditSarabiaSelisanaGeveraThe three partners share profits and losses equally. There remains P720,000 cash fordistribution to the partners.Required:Determine the manner of distribution of the remaining P720,000 under the followingindependent assumptions:1. Selisana is personally insolvent. He has no personal assets.2. Selisana is personally solvent and is willing to contribute additional funds into thepartnership to cover his deficit.3. Selisana is willing to make additional contributions but his personal assets are notsufficient to accommodate the deficit in his capital account. Only 60% of thedeficiency can be covered.

Liquidation of partnership means when the partnership comes to an end and the partnership agreement…

Determine the manner of distribution of the remaining P720,000 under the following independent assumptions: 1. Selisana is personally insolvent. He has no personal assets. 2. Selisana is personally solvent and is willing to contribute additional funds into the partnership to cover his deficit. 3. Selisana is willing to make additional contributions but his personal assets are not sufficient to accommodate the deficit in his capital account. Only 60% of the deficiency can be covered.

Determine the manner of distribution of the remaining P720,000 under the following independent assumptions: 1. Selisana is personally insolvent. He has no personal assets. 2. Selisana is personally solvent and is willing to contribute additional funds into the partnership to cover his deficit. 3. Selisana is willing to make additional contributions but his personal assets are not sufficient to accommodate the deficit in his capital account. Only 60% of the deficiency can be covered.

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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