The statement of financial position of the JKLM Partnership at July 31, 2021. when the partnership is to be liquidated, is as follows: Assets Liabilities and Capital P217,000 Cash Non-cash Assets P 105,000 Accounts Payable 2,205,000 J, Loan 210,000 K, Loan 252,000 M, Loan 168,000 283,500 J. Capital (25%) K, Capital (25%) 210,000 659,750 L, Capital (25%) M, Capital (25%) 309,750 P2,310,000 P2.310,000 During the month of August, assets having a carrying value of P315,000 are sold at loss of P42,000, Liquidation expenses of P10,500 are paid as well as P126,000 of the liabilities. Of the liabilities shown in the statement of financial position, P4,200 represents salary payable to K and P2,800 represents salary payable to L. During the month of September assets with carrying value of P1,200,000. were sold for P800,000; liquidation expenses of P16,000 were paid; cash of P20,000 was withheld for additional possible liquidation expenses. During the month of October, remaining non-cash assets were sold at a loss of P120,000 and additional liquidation expenses of P20,000 were paid. Remaining cash balance was distributed to the partners in final settlement of their equity. Required: (a) A statement of partnership liquidation with supporting schedules to show the amount of safe payment to partners in August and September. (b) Prepare a cash priority program, and based on the amounts available for distribution to partners in the months of August and September, prepare a schedule of payments to partners.
The statement of financial position of the JKLM Partnership at July 31, 2021. when the partnership is to be liquidated, is as follows: Assets Liabilities and Capital P217,000 Cash Non-cash Assets P 105,000 Accounts Payable 2,205,000 J, Loan 210,000 K, Loan 252,000 M, Loan 168,000 283,500 J. Capital (25%) K, Capital (25%) 210,000 659,750 L, Capital (25%) M, Capital (25%) 309,750 P2,310,000 P2.310,000 During the month of August, assets having a carrying value of P315,000 are sold at loss of P42,000, Liquidation expenses of P10,500 are paid as well as P126,000 of the liabilities. Of the liabilities shown in the statement of financial position, P4,200 represents salary payable to K and P2,800 represents salary payable to L. During the month of September assets with carrying value of P1,200,000. were sold for P800,000; liquidation expenses of P16,000 were paid; cash of P20,000 was withheld for additional possible liquidation expenses. During the month of October, remaining non-cash assets were sold at a loss of P120,000 and additional liquidation expenses of P20,000 were paid. Remaining cash balance was distributed to the partners in final settlement of their equity. Required: (a) A statement of partnership liquidation with supporting schedules to show the amount of safe payment to partners in August and September. (b) Prepare a cash priority program, and based on the amounts available for distribution to partners in the months of August and September, prepare a schedule of payments to partners.
Chapter21: Partnerships
Section: Chapter Questions
Problem 57P
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Transcribed Image Text:3.
The statement of financial position of the JKLM Partnership at July 31, 2021,
when the partnership is to be liquidated, is as follows:
Liabilities and Capital
Assets
Accounts Payable
P 217,000
Cash
Non-cash Assets
P 105,000
2,205,000
J, Loan
210,000
K, Loan
252,000
M, Loan
168,000
J, Capital (25%)
283,500
K, Capital (25%)
210,000
L, Capital (25%)
659,750
M, Capital (25%)
309,750
P2,310,000
P2,310,000
During the month of August, assets having
carrying value of
P315,000 are sold at loss of P42,000. Liquidation expenses of P10,500
are paid as well as P126,000 of the liabilities. Of the liabilities shown in I
the statement of financial position, P4,200 represents salary payable to K
and P2,800 represents salary payable to L.
During the month of September assets with carrying value of P1,200,000
were sold for P800,000; liquidation expenses of P16,000 were paid; cash
of P20,000 was withheld for additional possible liquidation expenses.
During the month of October, remaining non-cash assets were sold at a
loss of P120,000 and additional liquidation expenses of P20,000 were
paid. Remaining cash balance was distributed to the partners in final
settlement of their equity.
Required:
(a)
A statement of partnership liquidation with supporting schedules to
show the amount of safe payment to partners in August and
September.
(b)
Prepare a cash priority program, and based on the amounts
available for distribution to partners in the months of August and
September, prepare a schedule of payments to partners.
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