The partners of the 3E Partnership have decided to liquidate their partnership. The partnership statement of financial position just prior to liquidation is presented below: Assets Liabilities & Capital P 308,500 Cash P 63,000 455,500 Other Assets 90,000 Liabilities Escobar, Capital Elloso, Capital Echaves, Capital 90,000 30,000 P518,500 P 518,500 The other assets include a note receivable from Escobar in the amount of P75,000. The liabilities include a note payable to Elloso of P40,000 and a note payable to Echaves of P60,000. The partners share profits and losses in the ratio of 2:2:1, respectively. Instructions: 1. Determine the amount of cash each partner will receive for each of the following independent assumptions: a. The other assets are sold for P300,000 and all the partners are solvent. b. The other assets are sold for P270,000 and Escobar is insolvent. Escobar's net worth, exclusive of his interest in the partnership, is P4,000. C. The other assets are sold for P270,000 and P24,875 of liquidation expenses are paid. Escobar is insolvent.
The partners of the 3E Partnership have decided to liquidate their partnership. The partnership statement of financial position just prior to liquidation is presented below: Assets Liabilities & Capital P 308,500 Cash P 63,000 455,500 Other Assets 90,000 Liabilities Escobar, Capital Elloso, Capital Echaves, Capital 90,000 30,000 P518,500 P 518,500 The other assets include a note receivable from Escobar in the amount of P75,000. The liabilities include a note payable to Elloso of P40,000 and a note payable to Echaves of P60,000. The partners share profits and losses in the ratio of 2:2:1, respectively. Instructions: 1. Determine the amount of cash each partner will receive for each of the following independent assumptions: a. The other assets are sold for P300,000 and all the partners are solvent. b. The other assets are sold for P270,000 and Escobar is insolvent. Escobar's net worth, exclusive of his interest in the partnership, is P4,000. C. The other assets are sold for P270,000 and P24,875 of liquidation expenses are paid. Escobar is insolvent.
Chapter21: Partnerships
Section: Chapter Questions
Problem 11BCRQ
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Transcribed Image Text:The partners of the 3E Partnership have decided to liquidate their partnership. The
partnership statement of financial position just prior to liquidation is presented below:
Assets
Liabilities & Capital
Cash
P 63,000
Liabilities
P 308,500
Other Assets
455,500
Escobar, Capital
90,000
Elloso, Capital
90,000
Echaves, Capital
30,000
P518,500
P 518,500
The other assets include a note receivable from Escobar in the amount of P75,000. The
liabilities include a note payable to Elloso of P40,000 and a note payable to Echaves of
P60,000. The partners share profits and losses in the ratio of 2:2:1, respectively.
Instructions:
1.
Determine the amount of cash each partner will receive for each of the following
independent assumptions:
a. The other assets are sold for P300,000 and all the partners are solvent.
b. The other assets are sold for P270,000 and Escobar is insolvent. Escobar's
net worth, exclusive of his interest in the partnership, is P4,000.
C.
The other assets are sold for P270,000 and P24,875 of liquidation expenses
are paid. Escobar is insolvent.
2.
If the partners receive an offer of P140,000 for the business, exclusive of the
cash, would they be better off accepting the offer or liquidating under the
condition in la above?
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