E. Jose, Andres and Apo share profits in the ratio 50:30:20, respectively. Capital and loan balances just prior to partnership liquidation are: CAPITAL LOANS Jose P 120,000 Jose P 45,000 Andres 90,000 Andres
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
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E. |
Jose, Andres and Apo share profits in the ratio 50:30:20, respectively. Capital and loan balances just prior to |
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CAPITAL LOANS |
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Jose |
P 120,000 |
Jose |
P 45,000 |
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Andres |
90,000 |
Andres |
30,000 |
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apo |
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40,000 |
Apo |
13,000 |
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Non-cash assets are sold, and cash is distributed to partners in monthly installments during the course of liquidation as follows: January-P 15,000; February-P 40,000; March-P 90,000; april-P30,000 (final distribution) |
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Required: |
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a) |
Prepare a program to show how cash should be distributed during the entire course of liquidation. |
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b) |
Using the program developed in (a), prepare schedules summarizing the payments to be made to partners at the end of each month. |
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c) |
Prepare a Statement of Liquidation to summarize the course of liquidation. |
MODULE 3
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