B (30%), P340,000; and C (50%), P400,000. C is insolvent.ABC Co. filed for bankruptcy and is starting its liquidationUse the following information for Cases 1 and 2 below:3. ABC Co. filed for bankruptcy and is starting its liquidatioprocess. The partners' capital balances are: A (20%), P200Case 1: All the assets were sold and after settling the P600liabilities, P112,000 are available to the partners.Requirement: Compute for the cash distributions to the partners. P112,000 and total liabilities of P60,000.Case 2: After all the assets were sold, the partnership had cash ofRequirement: Compute for the cash distributions to the partners.Chapter 4Partnership Liquidation149ecordedDaguirement: Compute for the cash distributions to the partners.

CASE 1 : Normally, Cash is distributed to partners in their profit sharing ratio. However, It…

Answered: B (30%), P340,000; and C (50%),…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 12CE

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Similar questions

In liquidation, balances prior to the distribution of cash to the partners are: Cash P255,000; Moore, Capital P140,000; Simon, Capital P130,000, and Kelly, Capital P30,000. The income ratio is 6:2:2, respectively. How much cash should be distributed to Simon if Kelly does not pay his deficiency? -P122,500 -P130,000 -P126,250 -P118,750 the Following are classified under PPE Except? -Building -Land -Machinery -All are PPE Which of the following is considered as a Cash Equivalent? -Check -Postal money Order -Treasury Bill Issued 5 Months Ago , Acquired and Maturing 4 months from now -Treasury Bill Issued 1 year ago Acquired and Maturing 3 months from now
The statement of financial position of the firm AA, BB and CC immediately before liquidation shows the following: Assets 640,000 Liabilities 240,000 AA, Loan 64,000 AA, Capital 168,000 BB, Capital 120,000 CC, Capital 48,000 Total 640,000 AA, BB and CC share profits 5:3:2 respectively. Certain assets are sold for P440,000. Creditors are paid in full, partners are paid P140,000 and cash of P60,000 is withheld for contingencies. How much cash is to be distributed to AA?
Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. how much would Nina receive in the final settlement of his interest? how much would Guess receive in the final settlement of his interest?
Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. How much was the loss on realization? how much would Nina receive in the final settlement of his interest? how much would Ricci receive in the final settlement of his interest?
Quest Company is threatened with bankruptcy due to its inability to meet interest payments and fund requirements to retire P6,000,000 note payable with accrued interest payable of P600,000. The entity has entered into an agreement with the creditor to exchange equity instruments for the liability.The terms of the exchange are 300,000 ordinary shares wit P5 par value and P10 market value, and 25,000 preference shares with P10 par value and P60 market value. 1. What is the gain on the extinguishment of the note payable? 2. What is the total share premium from the issuance of the preference and ordinary shares?
ABC Corporation currently has $20,000 in cash, $30,000 in noncash assets, and liabilities of $35,000. The partners, Adrian, Batch, and Crenshaw, had capital balances of $5,000, $8,000, and $2,000, respectively. The partners share a profit and loss ratio of 1:1:3. The noncash assets were sold for $60,000. Complete the liquidation chart below.
The balance sheet accounts of partners Pacman, Marquez and Mayweather before liquidation are the following: Cash, P360,000; Non-Cash Assets, P1,785,000; Liabilities, P1,000,000; Pacman, Capital (50%), P460,000; Marquez, Capital (30%), P365,000 and Mayweather, Capital (20%), P320,000. On the first month of liquidation, certain assets with a book value of P1,200,000 are sold for P960,000. Liquidation expenses of P30,000 are paid and additional expenses are anticipated. Liabilities are paid amounting to P362,000, and sufficient cash is retained to insure the payment to creditors before making payment to partners. In the first payment of cash to partners, Marquez received P107,000.
ABC had capital balances of P40,000, P25,000 and P5,000 respectively with profit sharing ratio of 3:2:1 respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash left for distribution. What was the loss on the realization o the non-cash assets?
ABC Corporation currently has $7,000 in cash, $15,000 in noncash assets, and liabilities of $8,000. The partners, Adrian, Batch, and Crenshaw, had capital balances of $8,000, $2,000, and $4,000, respectively. The partners share a profit and loss ratio of 3:2:1. The noncash assets were sold for $3,000. Any capital deficiencies are absorbed by the remaining partners. Complete the liquidation chart below.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 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 $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
Slick, Tony and Sam partnership began the process of liquidation with the following account balances: Cash 16,000 Non-cash assets 434,000 Liabilities 150,000 Slick, Capital (30%) 80,000 Tony, Capital (20%) 90,000 Sam, Capital (50%) 130,000 Liquidation expenses are expected to be P12,000. After the liquidation expenses of P12,000 had been paid and the non-cash assets sold, Sam had a deficit of P8,000. Assuming all partners are personally insolvent, how much is the final settlement to Tony? P24,000 P34,800 P36,000 P37,200
Moose, Booze and Goose are partners with capital balances of P 320,000, P 450,000 and P 520,000 respectively with profit and loss sharing ratio of 2:3:5 respectively. The firm owes Booze P 20,000. Upon liquidation, P 390,000 is available for distribution to the partners. What amount of cash will Moose receive? a. P78,000 b. P136,000 c. P258,000 d. P320,000

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