Lump-Sum Liquidation Escareal, Acosta, and Lopez are liquidating their business. They share profits and losses in a 2:3:1 ratio, respectively, and currently have capital balances of P300,000, P210,000, and P390,000, respectively. In addition, the partnership has P150,000 in cash, P250,000 in accounts payable, and P1,000,000 in noncash assets. Escareal and Lopez are personally solvent, but Acosta is not. Assuming that the noncash assets are sold for P460,000, prepare the liquidation journal entries.
Lump-Sum Liquidation Escareal, Acosta, and Lopez are liquidating their business. They share profits and losses in a 2:3:1 ratio, respectively, and currently have capital balances of P300,000, P210,000, and P390,000, respectively. In addition, the partnership has P150,000 in cash, P250,000 in accounts payable, and P1,000,000 in noncash assets. Escareal and Lopez are personally solvent, but Acosta is not. Assuming that the noncash assets are sold for P460,000, prepare the liquidation journal entries.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #5
Lump-Sum Liquidation
Escareal, Acosta, and Lopez are liquidating their business. They share profits and losses
in a 2:3:1 ratio, respectively, and currently have capital balances of P300,000, P210,000,
and P390,000, respectively. In addition, the partnership has P150,000 in cash, P250,000
in accounts payable, and P1,000,000 in noncash assets. Escareal and Lopez are
personally solvent, but Acosta is not. Assuming that the noncash assets are sold for
P460,000, prepare the liquidation journal entries.
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