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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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:
Cash
P 30,000
Liabilities
P 40,000
Tejero, Loan
Orian, Capital
Orian, Loan
15,000
10,000
Non-cash Assets
135,000
80,000
Tejero, Capital
Lacson, Capital
Total Equities
36,000
14,000
Total Assets
P180,000
P180,000
The non-cash assets are sold for P100,000. Rather than require payments, all partners agreed to offset the
receivable from Orian against his capital credit.
Required:
1. Prepare a statement of liquidation.
2. Prepare the journal entries to account for the liquidation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff817d198-45c1-4e42-ba09-6153dac5bcce%2F316adfce-9140-4429-9c55-c0807e9ae907%2Frwlxu4g_processed.png&w=3840&q=75)
Transcribed Image Text: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:
Cash
P 30,000
Liabilities
P 40,000
Tejero, Loan
Orian, Capital
Orian, Loan
15,000
10,000
Non-cash Assets
135,000
80,000
Tejero, Capital
Lacson, Capital
Total Equities
36,000
14,000
Total Assets
P180,000
P180,000
The non-cash assets are sold for P100,000. Rather than require payments, all partners agreed to offset the
receivable from Orian against his capital credit.
Required:
1. Prepare a statement of liquidation.
2. Prepare the journal entries to account for the liquidation.
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