Numbers 16, 17 and 18 (Partnership Liquidation – Installment Liquidation) On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss ratio of 5:3:2 of respective partners A, B and C. showed the following information: Cash 1,600,000 Total Liabilities 2,000,000 100,000 500,000 400,000 Noncash assets 1,400,000 A, Capital В, Сарital C, Capital On January 1, 2019, the partners decided to liquidate the partnership in installment. All partners are legally declared to be personally insolvent. As of January 31, 2019, the following transactions occurred: • Noncash assets with a carrying amount P1,000,000 were sold at a gain of P100,000. • Liquidation expenses for the month of January amounting to P50,000 were paid. • It is estimated that liquidation expenses amounting to P150,000 will be incurred for the month of February, 2019. 20% of the liabilities to third persons were settled. Available cash was distributed to the partners. As of February 28, 2019, the following transactions occurred: • Remaining noncash assets were sold at a loss of P100,000. The final liquidation expenses for the month of February amounted to P100,000. The remaining liabilities to third persons were settled at a compromise amount of P1,500,000. • Remaining cash was finally distributed to the partners. 16. What is the amount of cash received by partner C on January 31, 2019? A. 260,000 В. 240,000 С. 300,000 D. 350,000
Numbers 16, 17 and 18 (Partnership Liquidation – Installment Liquidation) On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss ratio of 5:3:2 of respective partners A, B and C. showed the following information: Cash 1,600,000 Total Liabilities 2,000,000 100,000 500,000 400,000 Noncash assets 1,400,000 A, Capital В, Сарital C, Capital On January 1, 2019, the partners decided to liquidate the partnership in installment. All partners are legally declared to be personally insolvent. As of January 31, 2019, the following transactions occurred: • Noncash assets with a carrying amount P1,000,000 were sold at a gain of P100,000. • Liquidation expenses for the month of January amounting to P50,000 were paid. • It is estimated that liquidation expenses amounting to P150,000 will be incurred for the month of February, 2019. 20% of the liabilities to third persons were settled. Available cash was distributed to the partners. As of February 28, 2019, the following transactions occurred: • Remaining noncash assets were sold at a loss of P100,000. The final liquidation expenses for the month of February amounted to P100,000. The remaining liabilities to third persons were settled at a compromise amount of P1,500,000. • Remaining cash was finally distributed to the partners. 16. What is the amount of cash received by partner C on January 31, 2019? A. 260,000 В. 240,000 С. 300,000 D. 350,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Numbers 16, 17 and 18 (Partnership Liquidation – Installment Liquidation)
On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss
ratio of 5:3:2 of respective partners A, B and C. showed the following information:
Cash
Noncash assets
1,600,000
1,400,000
Total Liabilities
2,000,000
100,000
A, Capital
В, Сарital
С, Сарital
500,000
400,000
On January 1, 2019, the partners decided to liquidate the partnership in installment. All partners are
legally declared to be personally insolvent.
As of January 31, 2019, the following transactions occurred:
Noncash assets with a carrying amount P1,000,000 were sold at a gain of P100,000.
Liquidation expenses for the month of January amounting to P50,000 were paid.
It is estimated that liquidation expenses amounting to P150,000 will be incurred for the month
of February, 2019.
• 20% of the liabilities to third persons were settled.
Available cash was distributed to the partners.
As of February 28, 2019, the following transactions occurred:
Remaining noncash assets were sold at a loss of P100,000.
The final liquidation expenses for the month of February amounted to P100,000.
The remaining liabilities to third persons were settled at a compromise amount of P1,500,000.
Remaining cash was finally distributed to the partners.
16. What is the amount of cash received by partner C on January 31, 2019?
A. 260,000
В. 240,000
С. 300,000
D. 350,000
17. What is the share of B in the maximum possible loss on January 31, 2019?
A. 275,000
B. 110,000
С. 120,000
D. 165,000
18. What is the amount of total cash withheld on January 31, 2019?
A. 550,000
В. 1,600,000
C. 1,750,000
D. 1,700,000
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