HLOPHEKANE FARMING had the following balances when they commenced a simultaneous liquidation of the partnership: Farming equipment (cost)........ Farming equipment (accumulated depreciation)... Trade receivables... Trade payables.... The following transactions took place as part of the liquidation: 1. Farming equipment were sold for R198 800 2. Debtors settled their accounts in full 3. On settlement, the creditors granted a settlement discount of R1 600 Which one of the following alternatives represents the correct net profit (or loss) made on the simultaneous liquidation of Hlophekane Farming? a. R 460 500 b. R 197 100 c. R 62 900 d. R 64 500 R 397 500 R 134 200 R 64 600 R 29 900

HLOPHEKANE FARMING had the following balances when they commenced a simultaneous liquidation of the partnership: Farming equipment (cost)........ Farming equipment (accumulated depreciation)... Trade receivables... Trade payables.... The following transactions took place as part of the liquidation: 1. Farming equipment were sold for R198 800 2. Debtors settled their accounts in full 3. On settlement, the creditors granted a settlement discount of R1 600 Which one of the following alternatives represents the correct net profit (or loss) made on the simultaneous liquidation of Hlophekane Farming? a. R 460 500 b. R 197 100 c. R 62 900 d. R 64 500 R 397 500 R 134 200 R 64 600 R 29 900

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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The partnership of Kylie, Bamboo and Tank is being liquidated. The summarized balance sheet below depicts their financial position before liquidation: Cash Loans to Tank Other non-cash assets P 30,000 70,000 600,000 The other non-cash assets were sold at P400,000. 1. The excess cash distributed to Kylie is P40,000 A. True B. False Accounts payables P Kylie, loan Kylie, capital (40%) Bambo, capital (20%) Tank, capital (40%) 2. The excess cash distributed to Tank is P110,000 A. True B. False 3. The ending balance of non-cash assets after liquidation is P200,000 A. True B. False 280,000 30,000 90,000 150,000 150,000
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
Item Nos. 13 and 14 are based on the following information: The following are the assets and liabilities of Tee, Pak, and Long partnership on April 30, 200B prior to liquidation: Cash P 25,000 Liabilities. P 52,000 Other Assets 180,000 40,000 Tee Capital (40%) Pak Capital (40%) 65,000 Long Capital (20%) 48,000 P 205,000 P 205,000 The first sale of noncash assets having a carrying amount of P 90,000 realized P 50,000. 13. The amount of cash each partner should receive in the first installment is: a. Tee, P 0; Pak, P 0; Long, P 23,000. b. Tee, P O; Pak, P 5,000; Long, P 18,000. c. Tee, P 12,000; Pak, P 13,000; Long, P 18,000. C. d. Tee, P 27,000; Pak, P 5,000; Long, P 18,000. 14. If P 3,000 cash is withheld for future liquidation expenses, how much cash should Long receive? a. P 21,000. c. P 17,000. b. P 20,000. d. P 3,000.
The following are the account balances as of June 30, 2022 of JPP Partnership just before liquidation:Cash - 100000Inventory - 600000Furniture - 200000Equipment - 400000Accounts Payable - 200000Loans from Pedro - 200000Juan, capital - 20% - 300000Pedro, capital -35% - 310000Pablo, capital - 45% - 280000The following events occurred thereafter:Jul 1 - Equipment was sold for P380,000Jul 15 - Furniture was sold for P 210,000Jul 30 - Inventory with book value of P500,000 was sold for P200,000Aug 15 - Remaining inventory was sold for P 80,000a. Prepare a liquidation report.b. Prepare a cash distribution report/computation for safe payment for each time the partnership will be paying off the partners.c. Prepare a cash priority program and show how it can be used to settle the partner’s equity balances.d. Indicate on the space provided the total cash each partner would receive.
The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000
The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, Is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances / loss percent) Decrease highest LAP to next highest: Debit $ 6,800 30,000 22,000 99,700 Decrease LAPS to next highest: $ 158,500 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent. 3. The partners are considering an offer of $108,000 for the firm's accounts receivable, Inventory, and plant and equipment as of June 30. The $108,000 will be paid to creditors and the partners in Installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30,…
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 41,000 229,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $46,500 21,000 77,500 67,500 57,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $79,000 are sold for $62,500. How is the available cash to be divided?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets Req A1 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $19,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $78,000 are sold for $62,000. How is the available cash to be divided? Complete this question by entering your answers in the tabs below. Step 1 $ 40,000 224,000 Partner Capital Balance Drysdale Koufax Marichal Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. Step 2 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal,…
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 37,000 Liabilities $ 49,000 Noncash assets 209,000 Drysdale, loan 12,500 Drysdale, capital (50%) 71,500 Koufax, capital (30%) 61,500 Marichal, capital (20%) 51,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?
The Sheen, Jimmy and Carl partnership had the following balance sheet just before entering liquidation: Cash P10,000 Liabilities P130,000 Noncash assets 300,000 Sheen, capital 60,000 Jimmy, capital 40,000 Carl, capital 80,000 P310,000 P310,000 Sheen, Jimmy and Carl share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for P180,000. Liquidation expenses were P10,000. Assume that Jimmy was personally insolvent and could not contribute any assets to the partnership, while Sheen and Carl were both solvent. What amount of cash would Sheen receive from the distribution of partnership assets?
The partnership of Donald, Healey & Jaguar has experienced operating losses. The partners—who have shared profits and losses in the ratio of Donald, 10%; Healey, 30%; and Jaguar, 60%—are liquidating the business. They ask you to analyze the effects of liquidation and present the following partnership balance sheet at December 31, end of the current year: Requirements 1. Prepare a summary of liquidation transactions (as illustrated in Exhibit 12-5). The noncash assets are sold for $192,000. 2. Journalize the liquidation transactions.