Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2011, they decided to liquidate the business. The statement of financial position at that date is as follows:
Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2011, they decided to liquidate the business. The statement of financial position at that date is as follows:
Chapter22: S Corporations
Section: Chapter Questions
Problem 19CE
Related questions
Question
Transcribed Image Text:Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On
June 30, 2011, they decided to liquidate the business. The statement of financial position at that date is as
follows:
Cash
P 30,000
Liabilities
P 40,000
Tejero, Loan
Orian, Capital
Orian, Loan
15,000
10,000
Non-cash Assets
135,000
80,000
Tejero, Capital
Lacson, Capital
Total Equities
36,000
14,000
Total Assets
P180,000
P180,000
The non-cash assets are sold for P100,000. Rather than require payments, all partners agreed to offset the
receivable from Orian against his capital credit.
Required:
1. Prepare a statement of liquidation.
2. Prepare the journal entries to account for the liquidation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you