of P10,000 disposal costs. Additional P4,000 costs2.A, Capital500,000В, СарitalCashOther assetsLiabilities400,00040,000960,000100,000In the first month of liquidation, certain assets were soldP360,000, gross of P10,000 disposal costs. Additional P4,000 cookare anticipated before the liquidation is completed. Liabilitiesamounting to P56,000 were paid. Partial distributions were madto the partners. A and B share in profits and losses on a 3:1 ratioRequirement: Compute for the cash distributions to the partners.

Cash Available for Distribution Particulars Amount Cash Balance before liquidation 40,000…

Answered: In the first month of liquidation,…

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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On December 31m 3013 The Candy Company has $45,000 in cash, noncash assets of $120,000, liabilities of $50,000. The capital balances of the two partners are Tootsie $70,000 and Reeses $45,000. The firm is liquidated, and $120,000 is received for the noncash assets. Tootsie and Reeses income ratios are 70% and 30%, respectively. Instructions: Develop a cash distribution schedule and show the journal entry for each step in the liquidation process.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…
Ee 498.
Caroline Corporation had the following investment at FVTPL at the beginning of the current year: Fair ValueXYZ Corporation, 10,000 shares (originally cost P1,000,000) - P1,200,000DEF Company, 20,000 shares (originally cost P500,000) - 450,000During the current year, the following transactions occurred: Feb. 28 XYZ Corporation declared a 3-for-2 share split.Apr 31 DEF Company declared a 20% share dividend. The market value of DEF Company on this dateis P3.00. June 30 Sold 5,000 shares of DEF Company for P100,000, less brokers fee of P1,000.July 31 Sold 5,000 shares of XYZ Corporation for P135.Sept 30 Received share rights to purchase one share of XYZ Corporation for P100 per share. Thecompany should tender five rights for every share acquired. The market price of XYZCorporation shares on this date is P140.Oct. 31 Exercise all the share rights from XYZ Corporation. Dec. 31 The…
he following is an extract from the trial balance of Tempo Ltd on 30 June 2022:£Land and buildings 114 000Equipment 210 000Investment (80 000 shares of £1 each in Rhythm Ltd at cost price) 650 000Inventory (30/6/2008 - £382 000) 418 000Trade receivables (30/6/2021 – £180 000) 206 000Cash and cash equivalents 92 000Share capital:Ordinary share capital including premium 450 000Preference share capital 200 000Retained earnings:Balance – beginning of year 160 000Retained profit for the year 40 00012% Long term loan 420 000Trade payables (30/6/2021 – £190 000) 210 000Tax payable 110 000Dividends payable 100 000Additional information:1. Issued share capital:- 400 000 ordinary shares of £1 each- 40 000 10% preference shares of £5 each.2. Gross profit for the year amounted to £1 344 000 and represents 40% of turnover for the year.3. All sales and all purchases are on credit.4. Income from investment for the year amounted to £24 000.5. The dividends payable represents the total amount of…
Alfa Company is liquidating. It has the following account balances: Cash $5,000, Non-cash assets $60,000, Liability $31,000, A Capital $15,000, B Capital $17,800, and C Capital $1,200. The company sold its non-cash assets for $84,000 and the income ratios of the partners are 3:2:1 respectively. The balance of C, Capital after paying liabilities is: (Show your calculation)
Mani Ltd owns all the shares in Hani Ltd. On 1 March 2021, Mani Ltd sold inventories that cost $50,000 to Hani Lid for $SE.000. At the end of the financial year, beingjune 24 quarter of the inventories were sold by Hani Ltd to entities external to the group. In relation to this intragroup transaction, which of the following statement is correct? O Consolidated sales to be eliminated by $50,000 O Consolidated sales to be added by $58,000 O Consolidated profit to be oliminated by $6,000 O Consolidated profit to be eliminated by $8,000
Par Co. Incurred the following costs in order to acquire all of the shares of Sub Co.: • Purchase price (paid in cash) $500,000 • Legal fees $10,000 The business combination agreement states that if the earnings of Sub Co. exceed an average of $2.50 per share over the next two years, Par Co. will make an additional cash payment of $100,000 to the former shareholders of Sub Co. Recent earnings per share for Sub Co. have averaged $1.75. On the date of the business combination, it is not known whether the earnings target will be met. On the date of the combination, the acquisition cost would be calculated as: Multiple Cholce $500,000 $510,000 $610,000 $600,000
The following is an extract from the trial balance of Tempo Ltd on 30 June 2022:£Land and buildings 114 000Equipment 210 000Investment (80 000 shares of £1 each in Rhythm Ltd at cost price) 650 000Inventory (30/6/2008 - £382 000) 418 000Trade receivables (30/6/2021 – £180 000) 206 000Cash and cash equivalents 92 000Share capital:Ordinary share capital including premium 450 000Preference share capital 200 000Retained earnings:Balance – beginning of year 160 000Retained profit for the year 40 00012% Long term loan 420 000Trade payables (30/6/2021 – £190 000) 210 000Tax payable 110 000Dividends payable 100 000Additional information:1. Issued share capital:- 400 000 ordinary shares of £1 each- 40 000 10% preference shares of £5 each.2. Gross profit for the year amounted to £1 344 000 and represents 40% of turnover for the year.3. All sales and all purchases are on credit.4. Income from investment for the year amounted to £24 000.5. The dividends payable represents the total amount of…
Delaney Company sells, for $280,000, a 40% of the shares it owns in Hunter Company. The carrying value of the Equity Investment relating to these shares is $240,000 on the date of sale. The journal entry to record the sale assuming Delaney keeps control over Hunter includes: Select one: A. Equity investment, debit, $240,000 B. Gain, credit, $40,000 C. APIC, credit, $40,000 D. Equity investment, credit, $280,000
Pioneer Industries net worth is $ 75million. If the company was to be wound up today, it would realize $ 45million from the liquidation of its assets and pay $ 18million to its creditors and preference shareholders in full settlement of their claims. The number of outstanding equity shares of Pioneer is 1.5 million. Determine Pioneer's book value per share and its liquidation value.

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