The NPC Partnership has suffered financially due to poor results of operations for the past three years. N, P and C share profits and losses in the ratio of 1:3:6 respectively. The following is the condensed balance sheet as of March 31, 2012: Cash P 270,000 Liabilities P1,310,000Non-cash assets 2,020,000 N, Capital 210,000 P, Capital 390,000 C, Capital 380,000Total assets P2,290,000 Total Liabilities and Capital P2,290,000 All the non-cash assets were sold for P1,820,000. How much should each partner receive upon liquidation?

Statement of partnership liquidation Cash Non Cash Assets Payables N Capital P Capital C Capital…

Answered: The NPC Partnership has suffered…

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 NPC Partnership has suffered financially due to poor results of operations for the past three years. N, P and C share profits and losses in the ratio of 1:3:6 respectively. The following is the condensed balance sheet as of March 31, 2012:

Cash P 270,000 Liabilities P1,310,000

Non-cash assets 2,020,000 N, Capital 210,000

P, Capital 390,000

C, Capital 380,000

Total assets P2,290,000 Total Liabilities and Capital P2,290,000

All the non-cash assets were sold for P1,820,000. How much should each partner receive upon liquidation?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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