EXERCISE 8-9. Problem Solving 1: Selling price of non-cash assets; cash distribution. As of December 31, 2019, the books of May, Mae, and Mei showed capital balances of P300,000, P250,000, and P100,000, respectively, and cash balance of P25,000. They shared profits and losses equally. On that date, the partners decided to liquidate due to personal reasons. They sold all non-cash assets to Mia at a loss of P90,000. After settling the liabilities to external creditors amounting to P100,000, the partnership had enough cash to distribute to the partners that included a loan from May in the amount of P12,000. REQUIRED: 1. How much were the non-cash assets sold for? 2. How much cash was distributed to each partner?

EXERCISE 8-9. Problem Solving 1: Selling price of non-cash assets; cash distribution. As of December 31, 2019, the books of May, Mae, and Mei showed capital balances of P300,000, P250,000, and P100,000, respectively, and cash balance of P25,000. They shared profits and losses equally. On that date, the partners decided to liquidate due to personal reasons. They sold all non-cash assets to Mia at a loss of P90,000. After settling the liabilities to external creditors amounting to P100,000, the partnership had enough cash to distribute to the partners that included a loan from May in the amount of P12,000. REQUIRED: 1. How much were the non-cash assets sold for? 2. How much cash was distributed to each partner?

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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EXERCISE 8-10. Problem Solving 2: Gain or loss on realization of non-cash assets; capital deficiency absorption. Joshua, Daniel, and Martha were partners sharing profit and losses in the ratio of 1:2:1, respectively. On March 15, 2019, they decided to liquidate. Capital balances of Joshua, Daniel, and Martha were P215,000, P75,000, and P85,000, respectively. Liabilities amounting to P100,000 had yet to be settled. Total assets, inclusive of P35,000 cash, totaled P475,000. All non-cash assets were sold for only 30% of their book values. Liquidating expenses of P5,000 were also incurred. It was also determined that all partners, except Daniel, were solvent. REQUIRED: 1. How much was the gain or loss on non-cash asset realization? 2. How much cash should Martha infuse to satisfy the liquidation process of the partnership?
A. After all the non-cash assets have been converted into cash in the liquidation of Sun and Star Partnership, the ledger contains the following account balances: Cash - P141,000; Accounts Payable - P 96,000; Sun, Loan - P 45,000; Sun, Capital -(P21,000); Star, Capital - P21,000. How much is the final settlement to Sun assuming cash of P 96,000 is paid to Accounts Payable? B. Using data above, how much is the final settlement to Star? *
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1. How much cash should be contributed by Cathy?2. what capital/cash settlement should be made between Annie and Betty?
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Instructions:1. Prepare a Cash priority program.2. Prepare a Statement of Liquidation.3. Prepare the necessary journal entries to record the liquidation process.
#511 The balance sheet for Coney, Honey and Money partnership shows the following information as of December 31, 2021: Profit and loss ratio is 3:2:1 for Coney, Honey and Money, respectively. Other assets were realized as follows: Cash is distributed as assets are realized. The total cash received by Honey is P100,000 P30,000 P0 P40,000 The total loss to Coney is P60,000 P0 P40,000 P20,000 Cash received by Money in January 2022 is P10,000 P0 P4,000 P20,00
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How much cash should Ivan contribute?
F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: ASŞETS Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising Office Equipment Less Accumulated Depreciation 2,000 P 100,000 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) Anthony, Capital Davis, Capital 86,000 30,000 17,000 TOTAL LIABILITIES AND EQUITY P 153,000 The information concerning liquidation are as follows: 1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected. 2. Merchandise inventory were realized for P 25,000 3. The contract for Prepaid Advertising has a cancellation value of P 800. 4. Office Equipment were realized equal to 60% of their book value. 5. Unrecorded Accounts…