Jo, Pat and Espie are partners in a marketing consultancy firm and share profits and losses in the ratio of are 35:35:30 respectively. They decided to liquidate their business on Dec. 31, 2020. The following is the condensed statement of financial position preapred prior liquidation. Account Title Account Balance Debit Credit Cash 250,000.00 Other Assets 3,650,000.00 Liabilities 1,325,000.00 Pat Loan 65,000.00 Espie Loan 75,000.00 Jo, Capital 825,000.00 Pat, Capital Espie, Capital 755,000.00 855,000.00 3,900,000.00 3,900,000.00 The Non Cash Assets are sold for 1,285,000. 00 Partners are personally solvent Prepare a statement of Liquidation and the entries for the liquidation transactions

Jo, Pat and Espie are partners in a marketing consultancy firm and share profits and losses in the ratio of are 35:35:30 respectively. They decided to liquidate their business on Dec. 31, 2020. The following is the condensed statement of financial position preapred prior liquidation. Account Title Account Balance Debit Credit Cash 250,000.00 Other Assets 3,650,000.00 Liabilities 1,325,000.00 Pat Loan 65,000.00 Espie Loan 75,000.00 Jo, Capital 825,000.00 Pat, Capital Espie, Capital 755,000.00 855,000.00 3,900,000.00 3,900,000.00 The Non Cash Assets are sold for 1,285,000. 00 Partners are personally solvent Prepare a statement of Liquidation and the entries for the liquidation transactions

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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Problem1. Assume the following data for ABC Partnership had the following condensed balance sheet just before the liquidation on November 1, 2020: Assets Liabilities and Capital P 24,000 P 12,000 Cash Liabilities Non-cash assets 84,000 A, Loans A, Capital (30%) 2,400 9,600 B, Capital (50%) 48,000 36.000 C. Capital (20%) Total P108,000 P108.000 Liquidation expenses paid amounted to P1,000. Required: Compute for the total payment for each partner (including loans) using different assumptions: 1. Non-cash assets were realized at P 96,000. 2. Non-cash assets were realized at P36,000. The personal assets and liabilities of the partners on this date are as follows: Personal assets Personal liabilities A P288,000 216,000 108,000 P240,000 228,000 108,000 В
liquidate their business on September 30, 20xx. The following is the condensed profits and losses at a rate of 50%, 30% and 20% respectively. They decided to Terrence, Theodore and Thomas are partners in Toys4U Company: They sbare in Exercise 4. Installment Liquidation statement of financial position prior to liquidation: Toys4U Company Statement of Financial Position As at September 30, 20xx Liabilities and Capital Assets P 103,000 64,000 Cash P 43,450 Liabilities Terrence, Loan Terrence, Capital Theodore, Capital Thomas, Capital Total Liabilities and Capital P 538.400 Non-cash Assets 494,950 131,250 43,800 196,350 Total Assets P 538,400 The following data relate to the realization of non-cash assets: Вook Cash Liquidation Expenses Paid Liabilities Withheld P 9,600 Unrecorded Cash Value Realized October P197,600 P160,950 168,000 29,600 P12,400 P24,000 6,400 November 265,350 11,200 1,600 December 32,000 1,600 Required: 1. Statement of Liquidation from October to December 20xx. 2.…
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Partners Ong, Rodriguez, Pamittan and Reyes who share profits andlosses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. Allpartnership assets are to be converted into cash. Before liquidation, thecondensed statement of financial position follows:Cash P100, 000 Liabilities P750, 000Other Assets 1, 800, 000 Rodriguez, Loan 60, 000Reyes, Loan 50, 000Ong, Capital 420, 000Rodriguez, Capital 315, 000Pamittan, Capital 205, 000Reyes, Capital 100, 000Total P1, 900,000P1, 900,000The non-cash assets realized P800, 000, resulting to a loss of P1, 000,000. All the partners are solvent, and can contribute any additional cash tocover any deficiency. In the process of liquidation, deficiencies will occur andwill require additional investment as follows:a. Pamittan at P7, 500b. Reyes at P50, 000c. Reyes and Pamittan for P50, 000 and P7, 500, respectivelyd. None
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The statement of financial position of L, M, and N just before liquidation shows the following: Cash P 20,000 240,000 Non-cash Assets Accounts Payable N, Loan 40,000 40,000 L, Capital 62,000 M, Capital 88,000 30,000 N, Capital L, M, and N share profits and losses in the ratio of 3:2:5, respectively. The non-cash assets were sold for P160,000. 10. How much cash is available for distribution to partners in settlement of their capital balances?
Instagram Corporation has been undergoing liquidation since January 1. As of March 31, its condensed statement of realization and liquidation is presented below:Assets:Assets to be realized P 135,000Assets acquired 750,000Assets realized 1,200,000Assets not realized 1,375,000Liabilities:Liabilities Liquidated P 1,875,000Liabilities not liquidated 1,700,000Liabilities to be liquidated 2,250,000Liabilities assumed 1,625,000Revenues and Expenses:Supplementary Charges P 3,125,000Supplementary Credits 2,800,000The net gain (loss) for the three-month period ending March 31 is:a. P250,000b. P(325,000)c. P425,000d. P750,000
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