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FATHER SATURNINO URIOS UNIVERSITY ACCOUNTANCY PROGRAM

Name:

Instructor: Mr Lyndon P. Regodon, CPA Advance Accounting I (Acctg 409B)

Date:

Partnership Liquidation

Problem 1 The following condensed balance sheet is presented for the partnership share profits and losses in the ratio of 4:4:2, respectively:

of CERCEI, JAIME and TYRION, who

Cash

P

20,000

Liabilities

P

50,000

Other assets

180,000

CERCEI, capital

37,000

 

JAIME, capital

65,000

TYRION, capital

48,000

Total

P 200,000

Total

P 200,000

Assume that the partners decided to liquidate the partnership. The first sale of noncash assets having a book value of P90,000 realized P50,000 and all cash available after settlement with creditors was distributed. How should the available cash have been distributed to each partner?

Problem 2 SUMMER, GHOST, LADY and NYMERIA share profits in the ration of 2:1:1:1. The partnership cannot meet its obligations to creditors and dissolution is authorized on September 30, 2014. A Statement of Financial Position for the partnership on this date shows balances as follows:

Assets

Liabilities and capital Liabilities NYMERIA, Loan SUMMER, capital GHOST, capital LADY, capital NYMERIA, capital Total Liabilities and Capital

 

Cash

P

90,000

P 265,000

Other assets

400,000

25,000

 

50,000

50,000

50,000

50,000

Total assets

P 490,000

P 490,000

The personal status of partners on this date is determined to be as follows:

Partners

Personal assets

Personal Liabilities

SUMMER

P 250,000

P 150,000

GHOST

100,000

150,000

LADY

150,000

125,000

NYMERIA

200,000

250,000

The other assets of the partnership are sold and realized P120,000. Additional contributions by appropriate parties in meeting the claims of firm creditors were made. The amount that will be paid to the personal creditors of SUMMER would be?

Cash received by GHOST after liquidation is

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Problem 3 The following Statement of Financial Position was prepared for MYRCELLA, TOMMEN and JOFFREY Partnership on March 31, 2008: (2:2:1)

Cash

P

25,000

Liabilities MYRCELLA, capital TOMMEN, capital JOFFREY, capital Total Liabilities and capital

P

52,000

Other assets

180,000

40,000

 

65,000

48,000

Total assets

P 205,000

P 205,000

The partnership is being liquidated by the sale of assets in instalments. The first sale of non-cash assets having a book value of P90,000 realizes P50,000. The amount of cash each partner should receive in the first instalment

is:

;

;

Using the same information and assuming P3,000 cash is withheld for possible liquidation expenses, how much cash should JOFFREY receive?

a. 21,000

c. 3,000

b. 17,000

d. 18,000

Problem 4 As of December 31, 2008, the books of SLT Partnership showed a capital balances of SAMWELL- P40,000; LORAS- P25,000; THEON- P5,000. The partners’ profit and loss ratio was 3:2:1, respectively. The partners decided to dissolve and liquidate. They sold all the noncash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash left for distribution. The loss on realization of the noncash assets was:

a. 42,000

c. 45,000

b. 40,000

d. 28,000

The share of SAMWELL on the P28,000 cash for distribution was

a. 19,000

c. 18,000

b. 17,800

d. 28,000

The beginning balance of cash before liquidation is

The book value of the noncash assets sold was

Problem 5

J, K, L and M are partners, sharing earnings in the ration of 3:4:6:8. The balances of their capital amounts on December w1, 2014 are as follows:

J

P

1,000

K

25,000

L

25,000

M

9,000

P 60,000 The partners decided to liquidate and they accordingly convert the noncash assets into P23,200 cash. After paying the liabilities amounting to P3,000, they have P22,200 to divide. Assume that a debit balance in any of partner’s capital is uncollectible. The book value of the noncash assets amounted to:

a. 25,200

c. 61,000

b. 45,400

d. 63,000

The share of J in the loss upon conversion of the noncash assets into cash was:

a.

b.

4,792

5,257

c. 5,400

d. 1,000

When the P22,200 was divided, L received:

a.

b.

6,342

8,320

c. 10,800

d. 14,200

Love is a partnership of two unique people who bring out the very best in each other and who know that even though they are wonderful as individuals, they are even better together.

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