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Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: 58,000 60,000 8,000 14,000 70,000 Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) Cash 34,000 62,000 24,000 26,000 64,000 Inventory Loan to Omar Loan to Quek Plant assets-net Total assets 210,000 Total liab./equity 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions • All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. • No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio Partner's right to offset is allowed. Required: 1. Problem 2 - How much is the gain on sale of inventory? 2. Problem 2 - How much is the loss on sale of plant assets? 3. Problem 2 - How much is the contingent loss on non-sale of non-cash assets? P.

Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: 58,000 60,000 8,000 14,000 70,000 Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) Cash 34,000 62,000 24,000 26,000 64,000 Inventory Loan to Omar Loan to Quek Plant assets-net Total assets 210,000 Total liab./equity 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions • All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. • No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio Partner's right to offset is allowed. Required: 1. Problem 2 - How much is the gain on sale of inventory? 2. Problem 2 - How much is the loss on sale of plant assets? 3. Problem 2 - How much is the contingent loss on non-sale of non-cash assets? P.

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.26EX
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Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: Cash Inventory Loan to Omar Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) P 58,000 60,000 8,000 14,000 70,000 34,000 62,000 24,000 26,000 64,000 Loan to Quek Plant assets-net Total assets P 210,000 Total liab./equity P 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio • Partner's right to offset is allowed. Required: 1. Problem 2 - How much is the gain on sale of inventory? 2. Problem 2 - How much is the loss on sale of plant assets? 3. Problem 2 - How much is the contingent loss on non-sale of non-cash assets?
Transcribed Image Text:Exercise 2 The balance sheet of the Omar, Paolo, and Quek partnership on November 1, 2016 (before commencement of partnership liquidation) was as follows: Cash Inventory Loan to Omar Accounts payable Notes payable Omar, capital(40%) Paolo, capital(25%) Quek, capital (35%) P 58,000 60,000 8,000 14,000 70,000 34,000 62,000 24,000 26,000 64,000 Loan to Quek Plant assets-net Total assets P 210,000 Total liab./equity P 210,000 Liquidation events in November were as follows: - The inventory was sold for P10,000 above book value; - Plant assets with a book value of P60,000 were sold for P34,000. Other assumptions All non-cash assets left unsold would be considered as a contingent loss of the partnership and should be deducted from the capital accounts of the partners according to their profit or loss sharing ratio. No additional cash contribution from a partner with a deficit balance. A partner's deficit balance will be absorbed by the other partners based on their profit or loss sharing ratio • Partner's right to offset is allowed. Required: 1. Problem 2 - How much is the gain on sale of inventory? 2. Problem 2 - How much is the loss on sale of plant assets? 3. Problem 2 - How much is the contingent loss on non-sale of non-cash assets?
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