The partnership of Anthony and Davis had an unprotitable year and agreed to liquidate theirbusiness on December 31, 2019. The Statement of Financial Position as of December 31, 2019 ispresented below:ASSETSP 1,000CashP 80,00020,000Accounts ReceivableLess Allowance for Bad DebtsMerchandise InventoryPrepaid AdvertisingOffice EquipmentLess Accumulated DepreciationTOTAL ASSETS60,00050,0002,000P 100,00060,00040.000P 153,000LIABILITIES AND EQUITYAccounts PayableNotes Payable (due October 31, 2020)Anthony, CapitalDavis, CapitalP 20,00086,00030,00017,000P 153,000TOTAL LIABILITIES AND EQUITYThe information concerning liquidation are as follows:1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected.2. Merchandise inventory were realized for P 25,0003. The contract for Prepaid Advertising has a cancellation value of P 800.4. Office Equipment were realized equal to 60% of their book value.5. Unrecorded Accounts Payable of P 2,000 were discovered.6. Bank charges of P 1,000 was added to the note for early payment than the due date.Anthony is personally insolvent. However, Davis' personal assets exceeded his personal liabilitiesby P 4,000. Anthony and Davis share profits and losses 40%; 60%, respectively.Required:1. Prepare a schedule showing the net amount of liquidation gain or loss.2. Prepare a Statement of Liquidation.3. Journal entries to record the liquidation.

Partnership liquidation refers to the closing down of business operations by selling the non-cash…

Answered: P 1,00 P 80,000 20,000 60,00 50,0 2,00

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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F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: ASŞETS Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising Office Equipment Less Accumulated Depreciation 2,000 P 100,000 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) Anthony, Capital Davis, Capital 86,000 30,000 17,000 TOTAL LIABILITIES AND EQUITY P 153,000 The information concerning liquidation are as follows: 1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected. 2. Merchandise inventory were realized for P 25,000 3. The contract for Prepaid Advertising has a cancellation value of P 800. 4. Office Equipment were realized equal to 60% of their book value. 5. Unrecorded Accounts…
F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: A S S E T S Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising 2,000 Office Equipment P 100,000 Less Accumulated Depreciation 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) 86,000 Anthony, Capital 30,000 Davis, Capital 17,000 TOTAL…
Pepe, Pilar and Paz Partnership showed the following financial position on June 30, 2020, the date of liquidation: Assets Cash P20,000.00 Receivable from Paz 30,000.00 Other noncash assets 650,000.00 P700,000.00 Liabilities and Equity Accounts Payable P150,000.00 Notes Payable 260,000.00 Loans Payable to Pilar 65,000.00 35,000.00 Рере, Саpital Pilar, Capital Paz, Capital 70,000.00 120,000.00 P700,000 00 0.00 The partners share profits and losses equally. The other assets were sold for P530 000 00. Liquidation Expense of P60,000 were paid. The partners' personal record shows the following ing Personal TS, 30 Assets Personal Liabilities Pepe (general Partner) P100 000 00 P50 000 00 22) 200 .000 00
On December 31, 2018, the Statement of Financial Position of JKL Partnership with profit or loss ratio of 4:1:5 is presented below: On January 1, 2019, JKL partnership decided to liquidate. During their first month of liquidation, noncash asset with book value of P1,500,000 has been sold at a loss of P500,000. Liquidation expense amounting to P100,000 has been incurred and paid for the month of January while P150,000 is anticipated in the coming period. Liability to creditors has been paid in the amount of P750,000. What is the amount of cash distributed to K on the first month of liquidation?a. 175,000b. 250,000c. 162,500d. None
After years of operations, the partnership of De Vera, Dela Cruz, De Jesus is to be liquidated. After making the closing entries on February 28, 2022, the following accounts were left: Account Debit Credit Cash Non-cash Assets Liabilities De Vera, Capital Dela Cruz, Capital De Jesus, Capital 50,000 2,350,000 400,000 900,000 500,000 600,000 All the non-cash assets were sold for P2,650,000. Profits and losses are shared equally. Required: a. Prepare the statement of partnership liquidation b. Prepare the journal entries for the following: Sale of all non-cash assets and distribution of loss on realization to the partners • Payment of liabilities • Distribution of cash to the partners
The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000
The condensed, adjusted trial balance of the Gary and James Partnership as at December 31, 2024, appears below: Current assets Equipment Accounts payable Long-term debt GARY AND JAMES PARTNERSHIP Adjusted Trial Balance December 31, 2024 Gary, capital Gary, drawings James, capital James, drawings Service revenue Operating expenses 1. 2. Debit $50,000 117,500 295,000 270,000 93,000 $825,500 Credit $32,000 69,000 51,000 43,000 630,500 The partnership agreement stipulates that a division of partnership profit or loss is to be made as follows: A salary allowance of $347,500 to Gary and $287,500 to James. The remainder is to be divided equally. $825,500
Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at that date stood as follows: iii. iv. ASSETS Non-current assets Buildings Furniture Statement of Financial Position as at 31 March Current assets Inventory Trade receivables Allowance for doubtful accounts A. Bank Total current assets Total assets EQUITY AND LIABILITIES Capital -Adjani Capital - Malcolm Capital - Shanice C. Current a/c - Adjani Current a/c - Malcolm Current a/c - Shanice Additional information: Long-Term Liabilities Loan Current Liabilities Creditors Required: Prepare the following: a. Buildings realized $180,000 b. Debtors $233, 600 c. Inventory $83,000 Realization account B. Partners' capital accounts $ Bank account 2020 i. Adjani took over the furniture at an agreed value of $10,000 ii. Of the remaining assets: 250,000 15,000 $ 50,000 200,000.00 3,000 12,000.00 212,000.00 83,000…
On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustments showed the following: EE FF CASH 90,000 37,500 ACCOUNTS RECEIVABLE 185,000 135,000 INVENTORIES 300,000 1965,000 FURNITURE AND FIXTURES 350,000 100,000 ACCUMULATED DEPRECIATION (50,000) (10,000) OFFICE EQUIPMENT 115,000 27,500 PREPAID EXPENSES 63,750 30,000 TOTAL 1,053,750 515,000 ACCOUNTS PAYABLE 457,500 180,000 EE, CAPITAL 596,250 FF, CAPITAL 335,000 TOTAL 1,053,750 515,000 They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts.2. EE’s furniture and fixtures should be P310,000, while FF’s office equipment is underdepreciated by P2,500.3. Rent expense incurred previously by EE was not yet recorded amounting to P10,000, whilesalary expenses incurred by FF amounting to P8,000 was also not recorded.4. The fair value of EE’s and FF’s inventory amounted…
After several years of operations, the partnership of Arenas, Dulay and Laurente is to be liquidated. After making the closing entries on June 30, 2018, the following accounts remained open: Account Title Debit Credit Cash P 50,000 Non-cash Assets 2,350,000 Liabilities P 400,000 Arenas, Capital 900,000 Dulay, Capital 500,000 Laurente, Capital 600,000 The non-cash assets are sold for P2,650,000. Profits and losses are shared equally. Prepare a Statement of Partnership Liquidation and the entries to record the following: 1. Sale of all non-cash assets 2. Distribution of gain on realization to the partners 3. Payment of the liabilities
On December 31, 2020, the Statement of Financial Position of ABC partnership with profit or loss ratio of 4:1:5 is presented below: Cash 2,100,000 Liability to third person 5,600,000 Noncash asset 11,200,000 Alucard, capital 4,900,000 Baxia, capital 2,100,000 Claude, capital 700,000 On January 1, 2021, ABC partnership has been subjected to installment liquidation. As of January 31, 2021, the following data concerning liquidation are provided: o Noncash asset with book value of P8,700,000 has been sold at a loss of P2,800,000. o Liquidation expense amounting to P560,000 has been incurred for the month of January. o P840,000 cash has been withheld for future liquidation expense. o P4,200,000 liability has been paid. What is C’s share in the maximum possible loss on January 31, 2021? a. P1,050,000 b. P1,680,000 c. P1,820,000 d. P2,100,000 What is the amount received by B on January 31, 2021? a. P700,000 b. P840,000 c. P1,540,000 d. P2,240,000 What is the cash balance on January 31,…
What will i do for the liquidation expense stated in the problem related to parnership liquidation installment - cash priority program? Problem: On January 1, 2022, partners Kho, Lagman and Magno decided to liquidate their partnership. Prior to the liquidation, the partnersip had cash of P12,000, non-cash assets of P146,000, liabilities to outsiders of P36,000 and a note payable to Partner Magno of P14,000. The capital balances of the partners were: Kho - P36,000; Lagman-P54,000; Magno-P18,000. The partners share profits and losses in the ratio of 3:3:4,respectively.During January 2022, the partnership received cash of P30,000 from the sale of assets with a book value of P38,000 and paid P3,600 of liquidation expenses. During February, the partnership realized P44,000-from the sale of assets with a book value of P35,000 and paid liquidation expenses of P8,400. During March, the remaining assets were sold for P36,000. The partners agreed to distribute cash at the end of each…

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