Wally and Jose were in business for several years, sharing profits and losses equally. Because ofJose's poor health, they decided to liquidate the partnership. Wally managed the liquidationbecause Jose was in the hospital. Just before liquidation, the partnership balance sheetcontained the following information:CashOther AssetsTotal AssetsP 800,000P 2,200,000P 3,000,000LiabilitiesWally, CapitalJose, CapitalTotal Liabilities & EquityP 500,000P 1,000,000P 1,500,000P 3,000,000Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divided theremaining cash between them, according to their profit and loss sharing ratio.Jose received a note from Wally that read "Good news - sold other assets for P 1,750,000. Have P1,025,000 check waiting for you. Get well soon." Because he will not be released from the hospitalfor several days, Jose asks you to review Wally's liquidation and cash distribution procedures.Do you approve Wally's liquidation and cash distribution procedures? If you think Wally'scomputation is not correct, what amount of final cash settlement should Jose receive? Explain.

Liquidation - When a business experiences insolvency, the process of liquidation is initiated, which…

Wally and Jose were in business for several years, sharing profits and losses equally. Be Jose's poor health, they decided to liquidate the partnership. Wally managed the liq because Jose was in the hospital. Just before liquidation, the partnership baland contained the following information: Cash Other Assets Total Assets P 800,000 P 2,200,000 P 3,000,000 Liabilities Wally, Capital Jose, Capital Total Liabilities & Equity P 500,000 P 1,000,000 P 1,500,000 P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divi remaining cash between them, according to their profit and loss sharing ratio. loso received a note from Wally that road "Good news fold other assots for R1750.000

Wally and Jose were in business for several years, sharing profits and losses equally. Be Jose's poor health, they decided to liquidate the partnership. Wally managed the liq because Jose was in the hospital. Just before liquidation, the partnership baland contained the following information: Cash Other Assets Total Assets P 800,000 P 2,200,000 P 3,000,000 Liabilities Wally, Capital Jose, Capital Total Liabilities & Equity P 500,000 P 1,000,000 P 1,500,000 P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divi remaining cash between them, according to their profit and loss sharing ratio. loso received a note from Wally that road "Good news fold other assots for R1750.000

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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A-7
Subject: accounting
John and Joseph were in business for several years, sharing profits and losses equally. Because of Jose’s poor health, they decided to liquidate the partnership. John managed the liquidation because Joseph was in the hospital. Just before liquidation, the partnership balance sheet contained the following information: Cash P 800,000 Liabilities P 500,000 Other Assets P 2,200,000 John, Capital P 1,000,000 Joseph, Capital P 1,500,000 Total Assets P 3,000,000 Total Liabilities & Equity P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divided the remaining cash between them, according to their profit and loss sharing ratio. Joseph received a note from John that read “Good news – sold other…
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