Partners ABC, DEF and GHI share profits and losses in the ratio of 2:3:5, respectively. At the end of a very unprofitable year, they decided to liquidate the firm. The partner's capital account balances at this time are as follows: ABC - P22,000; DEF -P24,900 and GHI - P15,000. The liabilities accumulate to P30,000, including a loan of P5,000 from ABC. The cash balance is P6,000. All the partners are personally solvent. The partners plan to sell the assets in installment. If ABC received a total of P50,000 as a result of the liquidation, compute for the cash distributed to DEF. FICK Sult

Partners ABC, DEF and GHI share profits and losses in the ratio of 2:3:5, respectively. At the end of a very unprofitable year, they decided to liquidate the firm. The partner's capital account balances at this time are as follows: ABC - P22,000; DEF -P24,900 and GHI - P15,000. The liabilities accumulate to P30,000, including a loan of P5,000 from ABC. The cash balance is P6,000. All the partners are personally solvent. The partners plan to sell the assets in installment. If ABC received a total of P50,000 as a result of the liquidation, compute for the cash distributed to DEF. FICK Sult

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 43P

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
The following are independent events: a. A partnership is preparing to become a corporation and sell stock to the public. At this time, it decides to switch from accelerated to straight-line depreciation. b. A company has been debiting half its advertising costs to an intangible asset account and amortizing these costs over 3 years. c. A company has been using accelerated depreciation. It now estimates that the pattern of benefits to be received in the future will be equal each period, so it decides to change to the straight-line depreciation method. d. A company has been using straight-line depreciation for its property, plant, and equipment. It is now buying a new type of machine and elects to use accelerated depreciation on the new machine. e. A company switches from capitalizing certain expenditures to expensing them due to the issuance of an Accounting Standards Update that makes capitalization of these expenditures no longer generally accepted. Required: Identify the correct accounting treatment for the changes (if any) related to the preceding events.
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