Problem #112. Prepare the journal entries to account for the liquidation.1. Prepare a statement of liquidation.Lump-Sum LiquidationOrian, Tejero, and Lacson are partners in the OTL Electric Company and share profits inratio of 5:3:2. On June 30, 2014, they decided to liquidate the business. The statementof financial position at that date is as follows:CashP 20,00015,000135,000P 30,00010,00080,00036,000LiabilitiesOrian, LoanNon-cash AssetsTejero, LoanOrian, CapitalTejero, CapitalLacson, CapitalTotal Equities14,000P170,000Total AssetsP170,000The non-cash assets are sold for P95,000. Rather than require payments, all partnersagreed to offset the receivable from Orian against his capital credit.Required:1. Prepare a statement of liquidation.. Prepare the journal entries to account for the liquidation.

Statement of liquidation presents the manner in which, assets are realized, liabilities are settled,…

Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2014, they decided to liquidate the business. The statement of financial position at that date is as follows: P 20,000 15,000 135,000 Cash Liabilities P 30,000 Orian, Loan Non-cash Assets Tejero, Loan Orian, Capital Tejero, Capital Lacson, Capital Total Equities 10,000 80,000 36,000 14,000 P170,000 Total Assets · P170,000 The non-cash assets are sold for P95,000. 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.

Orian, Tejero, and Lacson are partners in the OTL Electric Company and share profits in ratio of 5:3:2. On June 30, 2014, they decided to liquidate the business. The statement of financial position at that date is as follows: P 20,000 15,000 135,000 Cash Liabilities P 30,000 Orian, Loan Non-cash Assets Tejero, Loan Orian, Capital Tejero, Capital Lacson, Capital Total Equities 10,000 80,000 36,000 14,000 P170,000 Total Assets · P170,000 The non-cash assets are sold for P95,000. 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.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 5CE

See similar textbooks

Similar questions

Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: Capital $8,000 Cash 8,000 Inventory 12,000 Store fixtures 8,000 Accounts payable 22,000 A competitor agrees to buy the inventory and store fixtures for $15,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. Assume that assets costing $74,000 are sold for $60,000. How is the available cash to be divided?
Partners Ong, Rodriguez, Pamittan and Reyes who share profits andlosses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. Allpartnership assets are to be converted into cash. Before liquidation, thecondensed statement of financial position follows:Cash P100, 000 Liabilities P750, 000Other Assets 1, 800, 000 Rodriguez, Loan 60, 000Reyes, Loan 50, 000Ong, Capital 420, 000Rodriguez, Capital 315, 000Pamittan, Capital 205, 000Reyes, Capital 100, 000Total P1, 900,000P1, 900,000The non-cash assets realized P800, 000, resulting to a loss of P1, 000,000. All the partners are solvent, and can contribute any additional cash tocover any deficiency. In the process of liquidation, deficiencies will occur andwill require additional investment as follows:a. Pamittan at P7, 500b. Reyes at P50, 000c. Reyes and Pamittan for P50, 000 and P7, 500, respectivelyd. None
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?
The statement of Financial Position of Highschool Kids, just before liquidation is as follows: Assets Liabilities & Capital Cash 50,000 Liabilities 70,000 Other assets 140,000 Loan, Young 20,000 Loans to Broke 10,000 Young, capital (50%) 30,000 Dumb, capital (30%) 50,000 Broke, capital (20%) 30,000 Total 200,000 Total 200,000 The partners Young and Dumb are personally insolvent. If non cash assets are sold for P150,000 and all liabilities are paid and liquidation expense of P5,000 are also paid, how much cash should Young, Dumb and Broke receive? Young Dumb Broke A. 32,500 51,500 31,000 B. 55,000 53,000 22,000 C. 52,500 51,500 21,000 D. 47,500 48,500 19,000
The Modesto Company is facing possible liquidation.Using the following information, prepare a statement offinancial affairs in good form.Here’s the company’s most recent balance sheet: Assets Liabilities and equities Cash $12,000 Accounts payable $170,000Accounts Receivable 60,000 Notes payable 90,000Inventory 120,000 Mortgage payable 80,000Investments 45,000Equipment 105,000 Common stock 75,000Land 82,000 Retained earnings 9,000Total assets $424,000 Total Liab. and Eq’s $424,000 The mortgage payable is fully secured by the land. The land can be soldimmediately for $103,000The equipment partially secures the notes payable. The equipment is not ingood shape and at auction will bring only $30,000The market has declined so the investments have lost 40% of their value.It is estimated that 30% of the accounts receivable will have to be written off.The inventory is outdated and will bring only 50% of its book value atauction.Additional income taxes will be $26,000Administrative expenses for…
8 ABC Company filed for a voluntary bankruptcy which was granted after having submitted all the required papers and documents. You are provided the following information as of June 30, 2022: Assets Net Book Value Liquidation Value Cash P 4,997 Investments in equity securities 25,000 P40,000 plus uncollected dividends of P5,000 Accounts receivable, net 54,000 P28,000 expected collection Inventory 75,000 P100,000 after further processing of P10,000 Prepaid expense 8,000 P2,000 is refundable Land 140,000 150% of net book value Building, net 200,000 90% of net book value Equipment 80,000 30% of net book value Goodwill 10,000 Liabilities and Equity Carrying Value Other Information Notes payable P120,000 Secured by inventory Trade and other payables 100,000 Loans payable 350,000 Secured by land and…
Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: Capital $8,000 Cash 6,000 Inventory 12,000 Store fixtures 8,000 Accounts payable 22,000 A competitor agrees to buy the inventory and store fixtures for $15,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank. Cash Cash Loss on Sale Loss on Sale Inventory Inventory Store Fixtures Store Fixtures Colette, Capital Colette, Capital Swarma, Capital Swarma, Capital Loss on Sale Loss on Sale Accounts Payable Accounts Payable Cash Cash Colette, Capital Colette, Capital Swarma, Capital Swarma, Capital Cash Cash
The partners in Crawford Company decide to liquidate the firm when the balance sheet shows the following. Crawford Company Balance Sheet May 31, 2020Assets Liabilities and Owners' EquityCash $ 27,500 Notes payable $ 13,500Accounts receivable 25,000 Accounts payable 27,000Allowance for doubtful accounts (1,000) Salaries and wages payable 4,000Inventory 34,500 A. Jamison, capital 30,000Equipment 21,000 S. Moyer,…
ABC Company is beginning the process of liquidation. ABC has prepared a statement of financial affairs that discloses the following data: Assets pledged with secured creditors $ 210,000 Secured liabilities 125,000 Assets pledged with partially secured creditors 290,000 Free assets (not including excess to be received from assets pledged on secured liabilities) 225,000 Unsecured liabilities with priority 121,000 Unsecured liabilities 450,000 ABC owes $45,000 to Wallace Company, an unsecured creditor (without priority). How much money can Wallace Company expect to collect from ABC?
A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values. Assets pledged with fully secured creditors $ 212,000 Fully secured liabilities 156,000 Assets pledged with partially secured creditors 386,000 Partially secured liabilities 502,000 Assets not pledged 306,000 Unsecured liabilities with priority 208,400 Accounts payable (unsecured) 396,000 The company owes $9,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect? The company owes $112,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $86,000. How much money can the bank expect to collect? a. Expected amount by creditor b. Expected amount by bank
Company A entered into a contract to purchase the assets of Company B except for cash, accounts receivable. Company A will provide Company B with enough funds to cover the liquidation of the business including accrued expenses. Under the contract, only the amount to pay out the loan was required at settlement. The balance is to be paid within 30 days of settlement. Company A will issue Company B shareholders one of its shares for every 5 of their Company B shares. Settlement occurred on 1 July 2022. Company A shares were valued at $12.25 per share. Company A incurred $9,000 in acquisition related expenses and $15,100 in share issue costs. Attached is a list of net fair value of assets and liabilities as estimated by Company A. The following costs also need to be covered by Company A Accrued employee benefits $43,000 Accrued loan interest to 1 July 2022 $15,680 Other accrued expenses $7,862 Other liquidation costs $8,920 1) Prepare and the acquisition analysis related journal entries of…