Wally and Jose were in business for several years, sharing profits and losses equally. Because ofJose's poor health, they decided to liquidate the partnership. Wally managed the liquidationbecause Jose was in the hospital. Just before liquidation, the partnership balance sheetcontained the following information:CashOther AssetsTotal AssetsP 800,000P 2,200,000P 3,000,000LiabilitiesWally, CapitalJose, CapitalTotal Liabilities & EquityP 500,000P 1,000,000P 1,500,000P 3,000,000Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divided theremaining cash between them, according to their profit and loss sharing ratio.Jose received a note from Wally that read "Good news - sold other assets for P 1,750,000. Have P1,025,000 check waiting for you. Get well soon." Because he will not be released from the hospitalfor several days, Jose asks you to review Wally's liquidation and cash distribution procedures.Do you approve Wally's liquidation and cash distribution procedures? If you think Wally'scomputation is not correct, what amount of final cash settlement should Jose receive? Explain.

Liquidation - When a business experiences insolvency, the process of liquidation is initiated, which…

Wally and Jose were in business for several years, sharing profits and losses equally. Be Jose's poor health, they decided to liquidate the partnership. Wally managed the liq because Jose was in the hospital. Just before liquidation, the partnership baland contained the following information: Cash Other Assets Total Assets P 800,000 P 2,200,000 P 3,000,000 Liabilities Wally, Capital Jose, Capital Total Liabilities & Equity P 500,000 P 1,000,000 P 1,500,000 P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divi remaining cash between them, according to their profit and loss sharing ratio. loso received a note from Wally that road "Good news fold other assots for R1750.000

Wally and Jose were in business for several years, sharing profits and losses equally. Be Jose's poor health, they decided to liquidate the partnership. Wally managed the liq because Jose was in the hospital. Just before liquidation, the partnership baland contained the following information: Cash Other Assets Total Assets P 800,000 P 2,200,000 P 3,000,000 Liabilities Wally, Capital Jose, Capital Total Liabilities & Equity P 500,000 P 1,000,000 P 1,500,000 P 3,000,000 Wally (1) sold the other assets for P 1,750,000, (2) paid off all the creditors, and (3) divi remaining cash between them, according to their profit and loss sharing ratio. loso received a note from Wally that road "Good news fold other assots for R1750.000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 65P

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