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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The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and liquidate all business property. During this process, the partners expect to incur $8,000 in liquidation expenses. All partners are currently solvent.The balance sheet reported by this partnership at the time that the liquidation commenced follows. The percentages indicate the allocation of profits and losses to each of the four partners. Cash . . . . . . . . . . . . . . . . . . . $ 28,250 Liabilities . . . . . . . . . . . . . . . $ 47,000Accounts receivable . . . . . 44,000 Larson, capital (20%) . . . . . . . 15,000Inventory . . . . . . . . . . . . . . . 39,000 Norris, capital (30%) . . . . . . 60,000Land and buildings . . . . . . 23,000 Spencer, capital (20%) . . . 75,000Equipment . . . . . . . . . . . . . . 104,000 Harrison, capital (30%) . . . . 41,250 Based on the information provided, prepare a predistribution plan for liquidating this partnership.
On December 31, 2015, partners Barry, Manny and Lou shares profits and losses by 30:50:20.Before the retirement of partner Barry, the partners have interest amounting to: Barry- 35,100,Manny- 56,500 and Lou- 21,400.Final settlement to Barry is amounted to 30,900. How much is the capital balance of Lou afterretirement?
Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are Carney, capital $ 79,000 Pierce, capital 32,700 Menton, capital 62,000 Hoehn, capital 25,700 Which of the following statements is true? (1)Carney will collect a portion of any available cash before Hoehn receives money. (2)The first available $7,700 will go to Hoehn. (3)The first available $10,600 will go to Manton. (4) Carney will be the last partner to receive any available cash.
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 44,000 Noncash assets 225,000 Frick, capital (60%) 132,000 Wilson, capital (20%) 36,000 Clarke, capital (20%) 77,000 Total assets $ 289,000 Total liabilities and capital $ 289,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation. Sold noncash assets with a book value of $96,000 for $64,000. Paid all liabilities. Distributed safe payments of cash again. Sold remaining noncash assets for $52,000. Paid actual liquidation expenses of $7,000 only. Distributed remaining cash to the…
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.
Fitzee, Chesher and Klotia have a partnership. They share income on the basis of the following ratio: 2:3:5. Each partner has the following capital balances respectively $220,000, $250,000, and $145,000. They decided to liquidate their business on July 3 because they wanted to pursue other interests. They had a big liquidation sale and they sold all non-cash assets for $445,000. They have the following accounts: Cash $200,000 Supplies $50,000 Equipment $150,000 Truck $65,000 Building $300,000 AP $200,000 Prepare all of the journal entries to close this business General Journal Page Date Particulars PR Debits Credits
Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are
On May 1, 2010, Clark, Kent and Louis are partners with capital balances of P 500,000, P 300,000 and P 400,000 respectively. They share profits and losses according to their capital balances. Louis died on this date. They have determined that the net income earned as of this date is P 325,000. However, inventories in the amount of P 40,000 has been considered worthless but was not considered in the determination of net income. Income earned for the year ended December 31, 2010 is P 760,000. The articles of partnership declared that in the case of death of a partner, the remaining partners may continue to use the demised partner’s fund until the end of the year provided he/she will be paid 18% interest from the date of his/her date. What amount will be paid to the estate of Louis? *
Nyfe, Ork and Poon decide to dissolve their partnership on 1 December 2015 after being in business for many years. The balance sheet of the partnership as at 30 November 2015 was as follows: Nyfe, Ork and Poon Balance sheet as at 30 November 2015 Assets Non-current assets $ $ Furniture and fittings 50,000 Motor vehicles 35,000 85,000 Current assets Inventory 25,000 Receivables 42,000 Bank 6,000 73,000 Total assets 158,000 Capital and liabilities Partners’ capital accounts Nyfe 45,000 Ork 30,000 Poon 15,000 90,000 Partners’ current accounts Nyfe 9,750 Ork 7,450 Poon 6,300 23,500 Loan 18,000 Current Liabilities Payables 26,500 Total capital and liabilities 158,000 Additional Information The partnership agreement…
The partnership of Donald, Healey & Jaguar has experienced operating losses. The partners—who have shared profits and losses in the ratio of Donald, 10%; Healey, 30%; and Jaguar, 60%—are liquidating the business. They ask you to analyze the effects of liquidation and present the following partnership balance sheet at December 31, end of the current year: Requirements 1. Prepare a summary of liquidation transactions (as illustrated in Exhibit 12-5). The noncash assets are sold for $192,000. 2. Journalize the liquidation transactions.