Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 50,000 150,000 $ 200,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $40,000 90,000 70,000 $ 200,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $30,000 of the partnership's liabilities. c. Sold noncash assets for $160,000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $10,000. f. Paid $4,000 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners.

True or False 4/29/2022 Instruction: Write "T" if the statement is correct and "F" if incorrect. 1. Liquidation refers to payment of all partnership's obligations during the process of dissolution. 2. When non-cash assets are sold less than the book value, the sale results to a gain on realization. 3. During the liquidation process, the partnership will focus on terminal activities. 4. Example of terminal activities are the sale of non-cash assets, payment of partnership's creditors and distribution of excess cash to the partners. 5. Right of offset is an established legal doctrine that a deficient partner can exercise to partly or fully apply his loan account to the partnership against his capital deficiency in the process of liquidation. 6. The first step of the liquidation process is the sale of the non-cash assets and distribution of realization gain or loss. - 499

In the liquidation of a partnership, it is necessary to (1) distribute cash to the partners, (2) sell noncash assets,  (3) allocate any gain or loss on realization to the partners  and (4) pay liabilities. These steps should be performed in the following order Select one: a. (2), (3), (1), (4). b. (2), (3), (4), (1). c. (3), (2), (1), (4). d. (3), (2), (4), (1).

Partnership Liquidation PROBLEM 4: MULTIPLE CHOICE-COMPUTATIONAL 1. The following condensed balance sheet is presented for the partnership of Smith and Jones, who share profits and losses in the ratio of 60:40, respectively: Other assets Smith, loan (AICPA) Cash Other assets Total assets 450,000 20,000 The partners have decided to liquidate the partnership. If the other assets are sold for P385,000, what amount of the available cash should be distributed to Smith? a. 136,000 b. 156,000 470,000 a. 25,000 b. 24,000 Total Accounts payable Smith, capital Jones, capital 2. The statement of financial position of the partnership of A, B and C shows the following information: 22,400 212,000 234,400 151 c. 159,000 120,000 195,000 155,000 470,000 Liabilities A, capital (50%) - B, capital (25%) C, capital (25%) Total liabilities & equity d. 195,000 38,400 76,000 The partners realized P56,000 from the first installment sale of non-cash assets with total carrying amount of P120,000. How much did B…

Problem 2. During liquidation, the Partnership of Pateno, Bautista and Apalisoc became insolvent. On Jan. 17, 2021, after all non-cash assets had been realized and all available cash had been distributed to creditors, the statement of financial position of the partnership is as follows: Liabilities and Partners' Capital: Accounts payable - Trade P60,000 120,000 Pateno, Capital Bautista, Capital -160,000 Apalisoc, Capital -20,000 P-0-1 Total liabilities & partners' capital The partners share profits and losses (including gains and losses in liquidaion) in the ratio 20 %, 50% and 30%, respectively. On Jan. 17, 2021, the personal financial positions of the partners were as shown below: Partner Assets Liabilities Pateno P60,000 P80,000 200,000 Bautista 280,000 Apalisoc 250,000 240,000 Required: Determine the receipt of cash from Bautista and Apalisoc, the appropriate distribution of cash, and the completion of the partnership liquidation.

k The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances/loss percent) Decrease highest LAP to next highest Debit $ 7,808 34,000 24,808 99,908 Decrease LAPs to next highest: $ 164,908 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent. 3. The partners are considering an offer of $110,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $110,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30, 20X1,…

Prepare a Statement of Partnership Liquidation and the entries to record the following:1. Sale of all non-cash assets2. Distribution of gain on realization to the partners3. Payment of the liabilities4. Distribution of cash to the partners

Required: Prepare the statement of liquidation.. Vic, Victor and Vincent are partners in Valentine partnership. They share profits and losses equally. Their financial position prior to liquidation follows: Lump-sum Liquidation Partnership is insolvent and partner/s are personally insolvent. Exercise 3. Valentine Partnership Statement of Financial Position As at August 31, 20xx Assets Liabilities and Capital P 80,000 800,000 Liabilities Cash Non-cash Assets P 480,000 40,000 Vic, Capital Victor, Capital Vincent, Capital Total Liabilities and Capital P 880.000 120,000 240.000 Total Assets P 880,000 The personal assets and liabilities of the partners, beside their equities in the partnership, are as follows: Personal Assets Personal Liabilities Partners P800,000 P500,000 : P 40,000 P300,000 P500,000 Vic Victor P140,000 Vincent Solvent partners are going to invest when cash is needed. Non-cash assets are sold for P425,000. Liabilities in the amount of P480,000 are paid.

In the liquidation of a partnership it is important to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners, and (4) pay liabilities. These steps should be performed in the following order: (3), (2), (4), (1) (3), (2), (1), (4) (2), (3), (1), (4) (2), (3), (4), (1)