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    ericamaecarpila0520

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    Quiz

    Uploaded by

    ericamaecarpila0520
    12 views3 pages

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    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    12 views3 pages

    Quiz

    Uploaded by

    ericamaecarpila0520

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    QUIZ

    On January 1, 2024, the partners of ABC Co. decided to liquidate their partnership. The
    following information was made available:

    Cash. P 20,000
    Accounts Receivable 60,000
    Inventory 120,000
    Equipment, net 300,000
    Total P 500,000

    Accounts Payable P 30,000


    Payable to B 20,000
    A, Capital (20%) 100,000
    B, Capital (30%) 150,000
    C, Capital (60%) 200,000
    Total P 500,000

    Information on the conversion of non-cash assets is as follows:


    a. P50,000 was collected on the accounts receivable; the balance is uncollectible.
    b. P70,000 was received for the entire inventory
    c. The equipment was sold for P250,000

    Requirements:
    1. Prepare the liquidation journal entries
    2. What is the amount of loss or gain on realization?
    3. What is the final distribution to each partner after liquidation?

    QUIZ
    On January 1, 2024, the partners of ABC Co. decided to liquidate their partnership. The
    following information was made available:

    Cash. P 20,000
    Accounts Receivable 60,000
    Inventory 120,000
    Equipment, net 300,000
    Total P 500,000

    Accounts Payable P 30,000


    B, Loan 20,000
    A, Capital (20%) 100,000
    B, Capital (30%) 150,000
    C, Capital (60%) 200,000
    Total P 500,000

    Information on the conversion of non-cash assets is as follows:


    a. P50,000 was collected on the accounts receivable; the balance is uncollectible.
    b. P70,000 was received for the entire inventory
    c. The equipment was sold for P250,000

    Requirements:
    1. Prepare the liquidation journal entries
    2. What is the amount of loss or gain on realization?
    3. What is the final distribution to each partner after liquidation?
    Answer:
    1. Liquidation Journal Entries

    Sale of Non-Cash Assets


    Cash 370,000
    Accounts Receivable 60,000
    Inventory 120,000
    Equipment,net 300,000

    Distribution of Loss on Realization


    A, Capital 22,000
    B, Capital 33,000
    C, Capital 55,000
    Loss on Sale 110,000

    Payment of Liability
    Accounts Payable 30,000
    Cash 30,000

    Exercise of Right of Offset


    B, Loan 20,000
    B, Capital 20,000

    Distribution of Cash to Partner's


    A, Capital
    B, Capital
    C, Capital
    Cash

    2. Total Book Values of Non Cash Assets- 480,000


    Total Selling Price of Non Cash Assets- 370,000
    Loss on Realization 110,000
    Handout

    Entries Related to Liquidation

    1. Sale of Non-Cash Assets 3. Payment of Liabilities


    Liabilities xxx
    a. At book Value Cash xxx
    Cash xxx
    Non-cash Assets xxx 4. Exercise of Right of Offset
    Partner A, Loan xxx
    b. Above Book Values Partner A, Capital xxx
    Cash xxx
    Non-Cash Assets xxx 5. Additional Investment by Deficient
    Gain on Realization xxx Partner
    Cash xxx
    c. Below Book Values Partner A, Capital xxx
    Cash xxx
    Loss on Realization xxx 6. Deficiency Absorbed by Solvent
    Non-Cash Assets xxx Partner
    Partner B, Capital. xxx
    2. Distribution of Gain or Loss on Partner A, Capital xxx
    Realization based on Partner’s P/L
    Ratio 7. Distribution of Cash to Partners
    Partner A, Capital. xxx
    a. Distribution of Gain on Realization Partner B, Capital xxx
    Gain on Realization xxx Cash xxx
    Partner A, Capital xxx
    Partner B, Capital xxx

    b. Distribution of Loss in Realization


    Partner A, Capital xxx
    Partner B, Capital xxx
    Loss on Realization xxx

    Business Name
    Statement of Liquidation
    Year

    Cash NCA Liabilities Partner A, Capital Partner B, Capital


    P/L Percentage % % .
    Balances before
    Liquidation xxx xxx xxx xxx xxx
    Sale of Non-Cash
    Assets and
    Distribution
    of Losses xxx ( xxx ) ( xxx ) ( xxx ) .
    Balances xxx xxx xxx xxx
    Payment of
    Liabilities to
    Outsiders ( xxx ) ( xxx ) .
    Balances xxx xxx xxx
    Distribution to
    Partners xxx xxx xxx .
    - - -

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