Nory and Oscar started a partnership some years ago and managed to operate profitably for several years. Recently, however, they lost a substantial legal suit and incurred unexpected losses on accounts receivable and inventories. As a result they decided to liquidate. They sold all assets and only P18,000 was available to pay liabilities, which amounted to P33,000. Their capital account balances before the state of liquidation and their profit sharing ratios are shown below: Capital balances P23,000 Profit sharing ratio Nory 60% Oscar P13,500 40% Nory is personally insolvent after paying the unpaid creditors, but Oscar has personal assets in excess of P100,000. In the settlement of partners, how much cash should Nory receive?

Nory and Oscar started a partnership some years ago and managed to operate profitably for several years. Recently, however, they lost a substantial legal suit and incurred unexpected losses on accounts receivable and inventories. As a result they decided to liquidate. They sold all assets and only P18,000 was available to pay liabilities, which amounted to P33,000. Their capital account balances before the state of liquidation and their profit sharing ratios are shown below: Capital balances P23,000 Profit sharing ratio Nory 60% Oscar P13,500 40% Nory is personally insolvent after paying the unpaid creditors, but Oscar has personal assets in excess of P100,000. In the settlement of partners, how much cash should Nory receive?

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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Question

Nory and Oscar started a partnership some years ago and managed to operate profitably for
several years. Recently, however, they lost a substantial legal suit and incurred unexpected
losses on accounts receivable and inventories. As a result they decided to liquidate. They sold
all assets and only P18,000 was available to pay liabilities, which amounted to P33,000. Their
capital account balances before the state of liquidation and their profit sharing ratios are shown
below:
Capital balances
P23,000
Profit sharing ratio
Nory
60%
Oscar
P13,500
40%
Nory is personally insolvent after paying the unpaid creditors, but Oscar has personal assets in
excess of P100,000. In the settlement of partners, how much cash should Nory receive?

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