Problem 2 The partnership of Lucena Watin and Julie Ann Veloso has come to an end. Upon their urgent request the accountant prepares the Statement of Financial Position as follows: Assets Liabilities and Partners' Equity Cash P 20,000 Liabilities P 60,000 L. Watin, Loan L. Watin, Capital J. Veloso, Capital Total Liabilities & Partners' Equity Inventories 80,000 100,000 10,000 40,000 90.000 P200.000 Furniture & Fixtures Total P 200.000 Non-cash assets were realized for P85,000. The partner's profit and loss sharing was 60%-40%, respectively. Required: Prepare Statement of Partnership liquidation assuming: 1. Watin is a solvent partner. 2. Watin is an insolvent partner. 3. Journal entry to record the partnership liquidation under the two (2) assumptions.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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