EXERCISE 8-10. Problem Solving 2: Gain or loss on realization of non-cash assets; capital deficiency absorption. Joshua, Daniel, and Martha were partners sharing profit and losses in the ratio of 1:2:1, respectively. On March 15, 2019, they decided to liquidate. Capital balances of Joshua, Daniel, and Martha were P215,000, P75,000, and P85,000, respectively. Liabilities amounting to P100,000 had yet to be settled. Total assets, inclusive of P35,000 cash, totaled P475,000. All non-cash assets were sold for only 30% of their book values. Liquidating expenses of P5,000 were also incurred. It was also determined that all partners, except Daniel, were solvent. REQUIRED: 1. How much was the gain or loss on non-cash asset realization? 2. How much cash should Martha infuse to satisfy the liquidation process of the partnership?
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- LO.4, 7 In December 2019, Carl Corporation sold land it held as an investment. The corporation received 50,000 in 2019 and a note payable (with adequate interest) for 150,000 to be paid in 2021. Carl Corporations cost of the land was 80,000. The corporation has a 90,000 net capital loss carryover that will expire in 2019. Should Carl Corporation report the sale in 2019 or use the installment method to report the income as payments are received?The loan and capital account balances of Hannah, Jean, Jenifer and Kristine Partnership were as follows on October 26, 2020, the date that the partnership began liquidation: Debit Credit Loan, Hannah P20,000 Loan, Jenifer P35,000 Hannah, Capital – 20% 30,000 Jean, Capital – 30% 15,000 Jenifer, Capital – 10% 25,000 Kristine, Capital – 40% 40,000 Required: 1. Prepare a cash priority program. 2. Assume that P20,000 cash is available for the first distribution, determine the cash to be received by the partners. 3. In continuation with the preceding number, another P15,000 cash is available for the next distribution, determine the cash to be received by the partners. Required: Prepare a statement of liquidation with safe payments schedule.#511 The balance sheet for Coney, Honey and Money partnership shows the following information as of December 31, 2021: Profit and loss ratio is 3:2:1 for Coney, Honey and Money, respectively. Other assets were realized as follows: Cash is distributed as assets are realized. The total cash received by Honey is P100,000 P30,000 P0 P40,000 The total loss to Coney is P60,000 P0 P40,000 P20,000 Cash received by Money in January 2022 is P10,000 P0 P4,000 P20,00
- 7. The following transactions of Best Pizza, owned by Reyes, Ortiz and Flores, took place from March 1 to May 31, 2019: (see attached images) March 1 Reyes, who owns an ice cream parlor, invested cash of P80,000 and merchandise costing P120,000 but with a fair value of P70,000. Customers’ accounts of P50,000 were also taken over by the partnership at its realizable valuc of 80%. (Recognize an allowance for doubtful accounts for 20% of cost). Ortiz invested cash of P40,000 and pieces of furniture costing P150,000 which the partners agree to be 50% depreciated to arrive at its current fair value. May 1 Flores, an expert in pizza making, invested imported cooking equipment costing P350,000 but which fair value dropped by 40% of its cost. Flores made a down payment of P200,000 when this was purchased and issued a note for the balance half of which is still unpaid. Partners agree that the liability will be assumed, by the partnership. May 31 Partners agree that additional cash investments…Lady and Gaga are partners sharing profits and losses in the ratio of 7:3, respectively. On October 1, 2021, they decided to liquidate the business when the account balances are Debit Credit Cash 50,000 Non-cash Assets 150,000 Liabilities 50,000 Lady, Capital 90,000 Gaga, Capital 60,000 During the same month, the non-cash assets were sold for 100,000. After paying the liabilities, Lady and Gaga, in final settlement of their interest, would receive cash of a. 105,000 and 45,000, respectively b. 90,000 and 60,000, respectively c. 55,000 and 45,000, respectively d. 70,000 and 30,000, respectivelyNEED ASAP. Solve correctly and show your computations. Ada, Bea, Cindy and Diane are partners, sharing earnings in the ratio of 3/21, 4/21, 6/21 and 8/21. The balances of their capital accounts on December 31, 2020 are: Ada, P10,000, Bea, P250,000; Cindy, P250,000; and Diane, P90,000. The partners decide to liquidate and they accordingly convert the noncash assets into cash. After paying the liabilities amounting to P60,000, they have P222,000 to divide. How much cash Bea should receive? A. P0 B. P138,800 C. P83,200 D. P44,000
- Alpha, Beta and Gamma were in partnership, sharing profits in the ratio of their fixed capitals On July 1, 2020 the partnership was dissolved, and Gamma took over a vehicle valued at $45,000. Creditors were paid $288,000 in full settlement, while debtors were allowed a discount of $15,000. The loan was repaid in full. Legal and accounting costs associated with the dissolution amounted to $55,000. $ $ Non-Current Assets Equipment 925,000 Motor vehicles 162,500 Current assets 1,087,500 Inventory 465,000 Receivables 232,500 Bank 60,000 Total current assets 757,500 Total assets 1,845,000 Financed by: Capital accounts Alpha 765,000 Beta 255,000 Gamma 255,000 1,275,000 Current accounts Alpha 60,000 Beta 40,000 Gamma 20,000 120,000 Long-term liability…A, B, C and D are partners, sharing earnings in the ration of 3:4:6:8. The balance of their capital accounts on December 21,2020 are as follows: A- P25,000; B- P625,000; C- P625,000 and D- P225,000. The partners decided to liquidate, and they accordingly convert the non-cash assets into P580,000 of cash. After paying the liabilities amounting to P75,000, they have P555,000 cash available for payment to partners. Assume that a debit balance in any of partner’s capital account is uncollectible. The book value of non-cash assets amounted to: ___On January 02, 2019, the business assets and liabilities of Gail Anne & Precious were as follows: Gail AnnePrecious CashP28,000P62,000 Receivables 200,000 600,000 Inventories 120,000 200,000 PPE 650,000 535,000 Other Assets 2,000 3,000 Accounts Payable 180,000 250,000 Notes Payable 200,000 350,000 Gail Anne and Precious agreed to form a partnership by contributing their net assets subject to the following adjustments: ➢ Receivables of P20,000 in Gail Anne’s books and P40,000 in Precious’ books are uncollectible ➢ Inventories of P6,000 and P7,000 in the respective books of Gail Anne and Precious are worthless ➢ Other assets in both books are to be written off ➢ Accrued interest on notes payable equal to 10% is to be established. The note payable of Gail Anne was dated August 01, 2018 while that of Precious, was dated April 01, 2018. The balances of selected accounts after the formation are: Assets…
- 17-18. The balance sheet of partners DES, PA and SITO as of December 31, 2020 are shown below: Cash– P50,000; Noncash assets – P250,000; Liabilities – P80,000; Des, Capital (50%) – P100,000; Pa, Capital(25%) P75,000; Sito, Capital (25%) – P45,000. On January 2021, certain noncash assets were sold for acertain amount. Liquidation expenses and liabilities of P4,000 and P25,000 were paid. Future liquidationexpenses of P5,000 are anticipated. Pa received P42,750 from the first distribution of available cash.17. How much is the cash received from the realization? a. P120,000b. P140,000c. P130,000d. P75,000AAA, BBB, and CCC are partners sharing profits and losses in the ratio of 5:3:2. During the year their investments and withdrawals are as follows: Investment of AAA, BBB and CCC for P200,000, P175,000 and P375,000 respectively. Withdrawals of AAA, BBB and CCC amounting to P125,000, P62,500 and P62,500 respectively. On December 31, 2021, the partners decided to liquidate their business. After exhausting partnership assets, liabilities of P125,000 remain unpaid. AAA is personally insolvent. The gain or loss on realization is:Question Asked Jul 24, 2020 Chan, Tan and Eric were in partnership sharing profits and losses in the ratio Chan 2/3, Tan 1/4 and Eric 1/12. Their summarized Balance Sheet as at 31 October 2019 was as follows: $$$ $ $ $ $$$ Fixed Assets (at Book Value) Premises 120 000 Machinery 60 000 Motor Vehicle 9 000 189 000 Current Assets Stock 14 200 Debtors 18 000 less Provision for Doubtful Debts 360 17 640 Bank 16 160…