On January 1, 20x20, ACJ Partnership entered into liquidation. Thepartners' capital balances on this date were as follows: A (25%)P2,500,000; C (35%) P5,400,000; J (40%) P3,700,000. Thepartnership has liabilities amounting to P4,400,000, including a loanfrom C P600,000. Cash on hand before the start of liquidation isP800,000.Noncash assets amounting to P7,400,000 were sold at book valueand the rest of the noncash assets were sold at a loss of P4,200,000.ow much cash will be distributed to the partners?

Balance Sheet Liabilities and Capital Amount Assets Amount Loan from C P600,000…

Answered: On January 1, 20x20, ACJ Partnership…

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 January 1, 20x1, the partners of ABC Co. decided to liquidate their partnership. The following information was made available: Cash Accounts receivable Inventory Equipment Total Accounts payable A, Capital (20%) B, Capital (30%) C, Capital (50%) Total 80,000 240,000 480,000 1,200,000 2,000,000 600,000 200,000 400,000 800,000 2,000,000 The net proceeds from the sale of non-cash assets amounted to P260,000. The personal assets and personal liabilities of the partners are as follows: A с B Personal assets 1,200,000 1,040,000 800,000 Personal liabilities (880,000) (880,000) (1,280,000) How much additional contributions shall be made by the partners in order to settle all of the partnership liabilities?
26. The Sheen, Jimmy and Carl partnership had the following balance sheet just before entering liquidation: Cash P10,000 Liabilities P130,000 Noncash assets 300,000 Sheen, capital 60,000 Jimmy, capital 40,000 Carl, capital 80,000 P310,000 P310,000 Sheen, Jimmy and Carl share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for P180,000. Liquidation expenses were P10,000. Assume that Jimmy was personally insolvent and could not contribute any assets to the partnership, while Sheen and Carl were both solvent. What amount of cash would Sheen receive from the distribution of partnership assets?
A partnership is currently holding $400,000 in assets and $234,000 in liabilities. The partnership is to be liquidated, and $20,000 is the best estimation of the expenses that will be incurred during this process. The four partners share profits and losses as shown. Capital balances at the start of the liquidation follow: Berzina, capital (40%) Horvath, capital (30%) Markov, capital (10%) Petronis, capital (20%) $ 59,000 39,000 34,000 34,000 Required: Prepare a predistribution plan to determine which partner will be the first to receive cash from the liquidation and what amount that partner will receive before other partners receive any cash. Note: Amounts to be deducted should be entered with a minus sign. Beginning balances Assumed loss Balances Assumed loss Balances Assumed loss Balances $ Berzina 147,500 Horvath Markov Petronis
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
Kershaw, Buehler, and Bauer are partners and agree to share profit and loss in the ratio of 30/30/40. The partners have agreed to liquidate, liquidation expenses will total $28,000. The following are the balances prior to liquidation: Cash, $100,000; Noncash assets, $700,000; Liabilities $354,000; Kershaw Capital, $200,000; Buehler Capital, $144,000 and Bauer Capital, $102,000. Assume actual liquidation expenses are $20,000 and noncash assets sold for $500,000 using an excel spreadsheet prepare a statement of partnership liquidation.
After operating for seven years, the books of the partnership of Kobe and Gasol showed the following balances: Net assets - P 169.000; Kobe, Capital - P 110,500: Gasol, Capital - P 58,500. If liquidation takes place at this point, and the net assets are at book value, how much would Kobe receive?
The partnership of H, M and R is liquidating and the ledger shows the following:Dr. Cash- P80,000Dr. Inventories- P100,000Cr. Accounts payable- P60,000Cr. H, Capital (50%)- P45,000Cr. M, Capital (25%)- P40,000Cr. R, Capital (25%)- P35,000If all cash available is distributed immediately: a. M should get P15,000 and R should get P5,000 b. M should get P12,500, and R should get P7,500 c. each partner should get P6,667 each d. each partner should get P26,667 each
The Bui, Clemente, Devian, and Toussaint partnership has terminated operations and is undergoing liquidation. Sales commissions and other liquidation expenses are expected to total $19,000. The partnership’s balance sheet prior to the commencement of liquidation is as follows: Cash $ 27,000 Liabilities $ 40,000 Noncash assets 254,000 Bui, capital (20%) 18,000 Clemente, capital (40%) 40,000 Devian, capital (20%) 48,000 Toussaint, capital (20%) 135,000 Total assets $ 281,000 Total liabilities and capital $ 281,000 Required: Prepare a predistribution plan for this partnership.
The following balance sheet accounts were taken from the partnership of ABC Co. on March 31, 2015: Cash-P500,000; Other Assets- P3,600,000; Liabilities-P1,040,000; Aly, Capital (40%)-P800,000; Bea, Capital (40%)-P1,300,000 and Cai, Capital (20%)-P960,000. The partnership was liquidated by installment. The proceeds from the first sale of non-cash assets with a book value of P1,800,000 amounted to P1,000,000. In the first month, P640,000 of the liabilities and P50,000 of unrecorded liabilities were paid. The partners also set aside P100,000 for future expenses.How much is the cash balance after the first installment payment?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 41,000 229,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $46,500 21,000 77,500 67,500 57,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $79,000 are sold for $62,500. How is the available cash to be divided?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 37,000 Liabilities $ 49,000 Noncash assets 209,000 Drysdale, loan 12,500 Drysdale, capital (50%) 71,500 Koufax, capital (30%) 61,500 Marichal, capital (20%) 51,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?
The Sheen, Jimmy and Carl partnership had the following balance sheet just before entering liquidation: Cash P10,000 Liabilities P130,000 Noncash assets 300,000 Sheen, capital 60,000 Jimmy, capital 40,000 Carl, capital 80,000 P310,000 P310,000 Sheen, Jimmy and Carl share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for P180,000. Liquidation expenses were P10,000. Assume that Jimmy was personally insolvent and could not contribute any assets to the partnership, while Sheen and Carl were both solvent. What amount of cash would Sheen receive from the distribution of partnership assets?

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