How much were the proceeds from the sale of the partnership's non-cash assets? How much cash will A invest in the partnership? How much will C receive as a result of their liquidation?
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.
The partnership of C, A, and G named BREAKEVEN decided to liquidate their partnership on May 31, 2021. Before liquidating and sharing of net income, their capital balances are as follows: C (30%) 250,000, A (30%) P180,000, and G (40%) P220,000. Net income from January 1 to May 31 is P120,000. Liabilities of the partnership amounted to P210,000 and its total assets include cash amounting to P70,000.
Unsettled liabilities are P110,000. C invested additional cash enough to settle their partnership's indebtedness. A is personally solvent, G is personally insolvent, and C becomes insolvent after investing the cash needed by the partnership.
- How much were the proceeds from the sale of the partnership's non-cash assets?
- How much cash will A invest in the partnership?
- How much will C receive as a result of their liquidation?
Step by step
Solved in 2 steps
