Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. OnJune 30, 2011, they decided to liquidate the business. The statement of financial position at that date is asfollows:CashP 30,000LiabilitiesP 40,000Tejero, LoanOrian, CapitalOrian, Loan15,00010,000Non-cash Assets135,00080,000Tejero, CapitalLacson, CapitalTotal Equities36,00014,000Total AssetsP180,000P180,000The non-cash assets are sold for P100,000. Rather than require payments, all partners agreed to offset thereceivable from Orian against his capital credit.Required:1. Prepare a statement of liquidation.2. Prepare the journal entries to account for the liquidation.

Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2011, they decided to liquidate the business. The statement of financial position at that date is as follows:

Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2011, they decided to liquidate the business. The statement of financial position at that date is as follows:

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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