Statement of Financial Position Dec 01, 2020 Assets P 25,000 75,000 100,000 300,000 P 500,000 Cash Accounts Receivable (net) Inventories Property and Equipment (net) Total Assets Liabilities and Capital Accounts Payable Loan Payable-Banana Apple, Capital Banana, Capital Lemon, Capital Total Liabilities and Capital P240,000 30,000 120,000 50,000 60.000 P500,000 mation: OThe personal assets (excluding partnership capital and loan interests) and personal liabilities of ea as of Dec. 1, 2021, are presented below: Banana P250,000 P300,000 P350,000 Apple Lemon Personal assets Personal liabilities (230,000) (240,000) (325,000) Personal net worth P 20,000 | P60,000 | P 25,000 OApple, Banana, and Lemon share profits and losses in the ratio 20:40:40, respectively. In the partnership agreement, interest will not accrue on partners' loan balances during the liquidatio
Statement of Financial Position Dec 01, 2020 Assets P 25,000 75,000 100,000 300,000 P 500,000 Cash Accounts Receivable (net) Inventories Property and Equipment (net) Total Assets Liabilities and Capital Accounts Payable Loan Payable-Banana Apple, Capital Banana, Capital Lemon, Capital Total Liabilities and Capital P240,000 30,000 120,000 50,000 60.000 P500,000 mation: OThe personal assets (excluding partnership capital and loan interests) and personal liabilities of ea as of Dec. 1, 2021, are presented below: Banana P250,000 P300,000 P350,000 Apple Lemon Personal assets Personal liabilities (230,000) (240,000) (325,000) Personal net worth P 20,000 | P60,000 | P 25,000 OApple, Banana, and Lemon share profits and losses in the ratio 20:40:40, respectively. In the partnership agreement, interest will not accrue on partners' loan balances during the liquidatio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
On December 1, 2021 – Apple, Banana, and Lemon decided to finally liquidate their partnership . (Statement of financial position /Balance sheet is given in the picture)
Required:
1. Prepare the liquidation journal entries.
2. Prepare the statement of liquidation.
Transcribed Image Text:ABL Partnership
Statement of Financial Position
Dec 01, 2020
Assets
P 25,000
75,000
100,000
300,000
P 500,000
Cash
Accounts Receivable (net)
Inventories
Property and Equipment (net)
Total Assets
Liabilities and Capital
Accounts Payable
Loan Payable-Banana
Apple, Capital
Banana, Capital
Lemon, Capital
Total Liabilities and Capital
P240,000
30,000
120,000
50,000
60.000
P500,000
Additional information:
a) The personal assets (excluding partnership capital and loan interests) and personal liabilities of each partner
as of Dec. 1, 2021, are presented below:
Apple
Banana
Lemon
Personal assets
P250,000 P300,000 P350,000
Personal liabilities (230,000) | (240,000) | (325,000)
Personal net worth P 20,000 | P60,000 || P 25,000
b) Apple, Banana, and Lemon share profits and losses in the ratio 20:40:40, respectively.
c) In the partnership agreement, interest will not accrue on partners' loan balances during the liquidation process.
d) All of the non-cash assets were sold on Dec. 10, 2021 for P260,000.
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