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o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital – 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОTAL 500,000 ТОTAL 500,000

o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital – 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОTAL 500,000 ТОTAL 500,000

FINANCIAL ACCOUNTING
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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The first image is the only requirement. The second image was the given and other guide to answer the question if needed (Optional). This is under Partnership Liquidation. Accounting for special transactions course. Thank u

 

RECONSTRUCTION OF INFORMATION o After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: ANK Compute for the following. Only this part Loss on sales > Share of Leni in the cash distribution to the partners > Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni)
Transcribed Image Text:RECONSTRUCTION OF INFORMATION o After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: ANK Compute for the following. Only this part Loss on sales > Share of Leni in the cash distribution to the partners > Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni)
CASE DISCUSSION: o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital – 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОTAL 500,000 ТОTAL 500,000 LUMP-SUM LIQUIDATION The non-cash assets were realized as follows: o 70% of the accounts receivable was collected; the balance is uncollectible o The entire Inventory was sold for P20,000 o P310,000 was received when the Equipment was sold o P12,000 liquidation expenses were paid. LUMP-SUM LIQUIDATION Collection from accounts receivable (60K x 70%) Sale of inventory Sale of equipment Liquidation expenses Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) 42,000 20,000 310,000 (12,000) 360.000 (470,000) (110,000) LOSS Leni (60%) 250.000 Isko (40%) ТОTAL Capital balance Pavable to (Receivable from) partner Total 450,000 200,000 20,000 220,000 (44.000) (110,000) 176,000 (10,000) 240,000 10,000 460,000 Allocation of loss -110K x 60% & 40% (66,000) Amounts received by the partners 174,000 350.000 1 INSTALLMENT LIQUIDATION Lenki will be liquidated on installment basis. Cash distributions to the partners will be made as cash becomes available. In the first month of liquidation, the non-cash assets were realized as follows: o 50% of the accounts receivable were collected, and of the remaining balance, P10,000 is deemed worthless o 75% of the inventory was sold at 80% of cost o Equipment with carrying amount of P200,000 was sold for P185,000 o P12,000 liquidation expenses were paid. Additional P5,000 are expected to be incurred in the subsequent periods. INSTALLMENT LIQUIDATION 30,000 72,000 Collection from accounts receivable (60K x 50%) Sale of inventory (120K x 75% x 80%) Sale of equipment Liquidation expenses Estimated future liquidation cost Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) 185,000 (12,000) (5,000) 270,000 (470,000) (200,000) LOSS Leni (60%) 250.000 (10,000) 240.000 Isko (40%) 200,000 20,000 220,000 ΤΟTAL Capital balance Payable to (Receivable from) partner Total 450,000 10,000 460,000 Allocation of loss (120,000) (80,000) (200,000) Amounts received by the partners 120,000 140,000 260,000 2
Transcribed Image Text:CASE DISCUSSION: o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital – 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОTAL 500,000 ТОTAL 500,000 LUMP-SUM LIQUIDATION The non-cash assets were realized as follows: o 70% of the accounts receivable was collected; the balance is uncollectible o The entire Inventory was sold for P20,000 o P310,000 was received when the Equipment was sold o P12,000 liquidation expenses were paid. LUMP-SUM LIQUIDATION Collection from accounts receivable (60K x 70%) Sale of inventory Sale of equipment Liquidation expenses Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) 42,000 20,000 310,000 (12,000) 360.000 (470,000) (110,000) LOSS Leni (60%) 250.000 Isko (40%) ТОTAL Capital balance Pavable to (Receivable from) partner Total 450,000 200,000 20,000 220,000 (44.000) (110,000) 176,000 (10,000) 240,000 10,000 460,000 Allocation of loss -110K x 60% & 40% (66,000) Amounts received by the partners 174,000 350.000 1 INSTALLMENT LIQUIDATION Lenki will be liquidated on installment basis. Cash distributions to the partners will be made as cash becomes available. In the first month of liquidation, the non-cash assets were realized as follows: o 50% of the accounts receivable were collected, and of the remaining balance, P10,000 is deemed worthless o 75% of the inventory was sold at 80% of cost o Equipment with carrying amount of P200,000 was sold for P185,000 o P12,000 liquidation expenses were paid. Additional P5,000 are expected to be incurred in the subsequent periods. INSTALLMENT LIQUIDATION 30,000 72,000 Collection from accounts receivable (60K x 50%) Sale of inventory (120K x 75% x 80%) Sale of equipment Liquidation expenses Estimated future liquidation cost Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) 185,000 (12,000) (5,000) 270,000 (470,000) (200,000) LOSS Leni (60%) 250.000 (10,000) 240.000 Isko (40%) 200,000 20,000 220,000 ΤΟTAL Capital balance Payable to (Receivable from) partner Total 450,000 10,000 460,000 Allocation of loss (120,000) (80,000) (200,000) Amounts received by the partners 120,000 140,000 260,000 2
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