Follow the instructions carefully. Requirement: Compute for the cash distributions to the partners.Case 2: Installment liquidationDone will be liquidated on installment basis. Cash distributions tothe partners will be made as cash becomes available. In the firstmonth of the liquidation process, the non-cash assets wererealized as follows:a. Half of the accounts receivable was collected. Of theremaining half, P10,000 accounts are deemed worthless.D. Seventy-five percent of the inventory was sold at 80% of cost.C. Equipment with carrying amount of P200,000 was sold forP185,000.d. P12,000 liquidation expenses were paid. Additional P5,000liquidation expenses are expected to be incurred insubsequent periods.Nequirement: Compute for the cash distributions to the partners.

Answer: If the partnership decides to liquidate, the assets of the partnership are sold,liabilities…

Answered: Requirement: Compute for the cash…

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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1. Done Partnership is undergoing liquidation. Information on Done is as follows: 20,000 Accounts payable 60,000 Payable to B 10,000 A; Capital (60%) 120,000 B, Capital (40%) 290,000 Cash 30,000 Accounts receivable Receivable from A 20,000 250,000 Inventory Equipment, net 200,000 Total 500,000 Total Liab. & Equity 500,000
After all the non-cash assets have been converted into cash in the liquidation of Sun and Star Partnership, the ledger contains the following account balances: Cash-P141,000: Accounts Payable - P 96,000; Sun, Loan - P 45,000: Sun, Capital -(P21.000); Star, Capital - P21,000. How much is the final settlement to Sun assuming cash of P 96,000 is paid to Accounts Payable?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets Req A1 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $19,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $78,000 are sold for $62,000. How is the available cash to be divided? Complete this question by entering your answers in the tabs below. Step 1 $ 40,000 224,000 Partner Capital Balance Drysdale Koufax Marichal Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. Step 2 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal,…
Non-Cash Assets recorded in the accounting records as $30 sold for $50 during the liquidation process. Consider the following: Easy, Capital Balance $12 Peasy, Capital Balance $13 Gains and Losses are divided equally. How would the partners' capital balances be affected by the sale of the non-cash assets? Group of answer choices a. Peasy's balance would increase by $10 . b. Peasy's balance would decrease by $10 . c. Peasy's balance would increase by $13. d. Peasy's balance would decrease by $13.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. Assume that assets costing $74,000 are sold for $60,000. How is the available cash to be divided?
Use the following information for the next two questions: Farewell Partnership is undergoing liquidation. Information on Farewell follows: Cash 40,000 Accounts receivable 180,000 Receivable from B 10,000 Inventory 160,000 Equipment 310,000 Total 700,000 Accrued liabilities 250,000 Payable to A 20,000 A, Capital (60%) 240,000 B, Capital (40%) 190,000 Total 700,000 Case #1: Lump-sum liquidation Information on the conversion of non-cash assets is as follows: Only 60% of the accounts receivable was collected; the balance is uncollectible. ₱50,000 was received for the entire inventory. The equipment was sold at its carrying amount. ₱10,000 Liquidation expenses were paid. Requirement: Determine the amounts of cash distributed to the partners in the final settlement of their capital…
Statement I: In lumpsum liquidation, the remaining cash available after realization and payment of liquidation expenses, will be equal to the total interest of the partners.Statement II: In installment liquidation, the partner who has the highest absorption capacity shall be prioritized in the payment of interest. Group of answer choices Both statements are false Both statements are true S1 is true; S2 is false S1 is false; S2 is true
CC admits DD as a partner in business. Accounts in the ledger for CC on November 30, 20x4, just before the admission of DD, show the following balances: Cash.... P 6,800 Accounts Receivable... 14,200 Merchandise Inventory... 20,000 Accounts Payable.. . 8,000 CC, Capital... 33,000 It is agreed that for the purposes of establishing CC's interest the following adjustments shall be made: 1. An allowance for doubtful accounts of 3% of account receivable is to be established. 2. The merchandise inventory is to be valued at P23,000. 3. Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. 1 DD ic to invest sufficient cash to obtain a 1/3 interest in the
After operating for 5 years, the books of A and B showed the following balances with equal distribution in profit: Assets (Cash and Non-cash assets) 130,000 A, Capital B, Capital If liquidation takes place at this point and the net assets are realized at P150,000. Profits and losses are shared equally. Compute the amount of cash distributed to partner B in the final settlement of their capital account. 60,000 70,000
After Non-Cash Assets have been sold and liabilities paid, the final step in the liquidation process is to distribute the balance of Cash to the partners. Consider the following: Cash $20 A, Capital Balance $8 B, Capital Balance $12 Gains and losses are shared equally between the partners. Which of the following is correct? Group of answer choice a.B would receive$12 as the final payment of cash. b. B would receive $10 as the final payment of cash. c. B would receive $8 as the final payment of cash. d. B would receive $20 as the final payment of cash.
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…
The ABC Partnership is to be liquidated. The ledger shows the following: Cash $ 70,000 Noncash Assets 220,000 Liabilities 90,000 A, Capital 85,000 B, Capital 90,000 C, Capital 25,000 A,B, and C's income ratios are 5:3:2, respectively. The non-cash assets are sold for $170,000. Instructions Prepare a schedule of liquidation using the following chart: Cash NC assets Liabilities A, Cap B, Cap C, Cap Beg Balance Sale of assets Balance Pay liabilities Balance Distribute cash End Balance Prepare the 4…

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