Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
83
CHAPTER 5
MULTIPLE CHOICE ANSWERS AND SOLUTIONS
5-1: b
Capital balances before liquidation
Loan balances
Total interest
Possible loss (40,000+10,000)
Balances
Additional loss to RJ & SJ, 5:3
Cash distribution
RJ
P22,000
_10,000
32,000
( 25,000)
7,000
( 1,250)
P 5,750
SJ
P30,000
______
30,000
( 15,000)
15,000
( 750)
P14,250
TJ
P 8,000
______
8,000
( 10,000)
( 2,000)
__2,000
P
Capital balances
Loan balances
Total interest
Possible loss (23,000-6,000)
Balances
Additional loss to BR, CR, DR, 3:2:1
Balances
Additional loss to CR & DR, 2:1
Payment to partners
AR
P 5,500
_1,000
6,500
( 6,800)
( 300)
___300
_____
P
BR
P 5,150
_____
5,150
( 5,100)
50
( 150)
( 100)
___100
P
CR
P 6,850
_____
6,850
( 3,400)
3,450
( 100)
3,350
_( 67)
P 3,283
Total liabilities
Total Capital
Total Assets
P 1,000
_22,000
P23,000
5-2: a
DR
P 4,500
_____
4,500
( 1,700)
2,800
( 50)
2,750
_( 33)
P 2,717
5-3: c
Capital balances
Loan balances
Advances
Total interest
Divided by P/L Ratio
Loss Absorption balances
PI - TO GG
Balances
PII - TO EE & GG, 30:10
Balances
PIII - TO EE, FF, GG, 3:1:1
Balances
PIV - P/L Ratio
DD
P40,000
5,000
_____
45,000
____50%
90,000
_____
90,000
_____
90,000
_____
P90,000
BALANCES
EE
FF
P30,000
P15,000
10,000
_____
( 4,500)
40,000
10,500
____30%
____10%
133,333
105,000
_____
( 91,667)
133,333
105,000
( 28,333)
_____
105,000
105,000
(15,000)
( 15,000)
P90,000
P90,000
GG
P25,000
( 2,500)
22,500
____10%
225,000
__ __
133,333
( 28,333)
10,500
( 15,000)
P90,000
84
Chapter 5
DD
PI - To GG
PII - To EE (28,833 X 30%)
GG (28,833 X 10%)
PIII To EE (15,000 X 30%)
FF (15,000 X 10%)
GG (15,000 X 10%)
_____
Total
PIV - P/L Ratio
DD
Distribution of P18,000
PI - TO GG
PII - TO EE & GG, 3:1, P8,833
Cash distribution
CASH PAYMENT
EE
FF
P 8,433
4,500
1,500
_____
_____
GG
P 9,167
2,833
__1,500
P12,933
P 1,500
P13,500
EE
FF
GG
_____
_6,625
_____
P 9,167
__2,208
P 6,625
P11,375
5-4: a
Capital balances before liquidation
Loss on realization, P40,000
Capital balances before cash distribution
Possible loss, P90,000
Balances
Additional loss to Lim & Wan, 4:2
Cash distribution
TAN
P40,000
( 16,000)
24,000
( 36,000)
( 12,000)
_12,000
P
LIM
P65,000
( 16,000)
49,000
( 36,000)
13,000
( 8,000)
P 5,000
WAN
P48,000
( 8,000)
40,000
( 18,000)
22,000
( 4,000)
P18,000
TAN
P24,000
( 37,200)
( 13,200)
_13,200
P
LIM
P49,000
( 18,600)
30,400
( 8,800)
P21,600
WAN
P40,000
( 18,600)
21,400
_( 4,400)
P17,000
CARPIO
P72,000
( 5,000)
67,000
( 55,000)
12,000
( 6,000)
P 6,000
LOBO
P54,000
( 5,000)
49,000
( 55,000)
( 6,000)
__6,000
P
5-5: b
5-6: d
Tan (14,000 X 40%)
Lim (14,000 X 40%)
Wan (14,000 X 20%)
P5,600
P5,600
P2,800
5-7: a
Capital balances before liquidation
Goodwill written-off
Cash balance
Possible loss (100,000+10,000), 110,000
Capital balances before liquidation
Additional loss to Carpio
Cash distribution
85
5-8: d
JACOB
P40,000
( 15,000)
( 1,000)
24,000
__8,000
32,000
( 45,000)
( 13,000)
_13,000
P
SANTOS
P72,000
( 9,000)
( 600)
62,400
_____
62,400
27,000
35,400
( 7,800)
P27,600
HERVAS
P 7,000
( 6,000)
( 400)
63,600
_____
63,600
( 18,000)
45,600
( 5,200)
P40,400
A
P16,200
_____
16,200
( 600)
15,600
( 150)
15,450
12,000
27,450
( 27,000)
450
( 780)
( 330)
___330
P
B
P12,000
___160
12,000
( 600)
11,400
( 150)
11,250
14,400
25,650
( 27,000)
( 1,350)
__1,350
_____
P
C
P37,700
___240
37,860
( 600)
37,260
( 150)
37,110
_____
37,110
( 27,000)
10,110
( 780)
9,330
( 330)
P 9,000
D
P17,700
_______
( 17,940)
( 600)
17,340
( 150)
17,190
__9,600
26,790
( 27,000)
( 210)
____210
_____
P
DY
P22,000
2/4
44,000
_____
44,000
_____
P44,000
BALANCES
SY
P15,500
1/4
62,000
( 6,000)
56,000
( 12,000)
P44,000
LEE
P14,000
1/4
56,000
_____
56,000
( 12,000)
P44,000
5-9: d
Capital balances before liquidation
Salary payable
Balances
Loss on realization (P2,400)
Balances
Liquidation expenses (P600)
Balances
Loan balances
Total interest
Possible Loss (126,000-18,000)
Balances
Additional loss to A & C
Balances
Additional loss to C
Cash distribution
5-10: a
Total interest
Profit and Loss ratio
Loan absorption balances
Priority I - to Sy
Balances
Priority II - to Sy & Less
Total
DY
Priority I - to Sy (6,000 X 1/4)
Priority II - to Sy (12,000 X 1/4)
to Lee (12,000 X 1/4)
Total
_____
P
CASH PAYMENTS
SY
LEE
1,500
3,000
_____
_3,000
P 4,500
P 3,000
86
Chapter 5
Further cash distribution, profit and loss ratio
Cash distribution to Dy
Divided by Dy's Profit and Loss ratio
Amount in excess of P7,560
Total payment under priority I & II
Total cash distribution to partner
P 6,250
2/4
12,500
__7,500
P20,000
5-11: d
Cash before liquidation
Cash realized
Total
Less:
Payment of liquidation expense
Payment of liability
Payment to partners (Q 5-10)
Cash withheld
P12,000
_32,000
44,000
P 1,000
5,400
20,000
_26,400
P17,600
5-12: c
Loss absorption balances:
Cena (18,000/50%)
Batista (27,000/30%)
Excess of Batista
Multiply by Batista's Profit & Loss ratio
Priority I to Batista
P36,000
90,000
54,000
____30%
P16,200
5-13: c
Capital balances
Loan balances
Total interest
Divided by Profit and Loss Ratio
Loss Absorption balances
Priority I to CC
Balances
Priority II to BB & CC, 2:1
Total interest
AA
P15,000
10,000
25,000
2/5
62,500
_____
62,500
_____
P62,500
AA
Priority I to CC (12,500 X 1/5)
Priority II to BB (25,000 X 2/5)
to CC (25,000 X 1/5)
Total
Priority III P/L Ratio
Cash distribution to CC:
Priority I
Priority II (12,000-2,500) X 1/3
Total cash paid to CC
____
P
BALANCES
BB
P30,000
_5,000
35,000
2/5
87,520
_____
87,520
( 25,000)
P62,500
CC
P10,000
10,000
20,000
1/5
100,000
( 12,500)
100,000
( 25,000)
P62,500
CASH PAYMENTS
BB
CC
2,500
10,000
_____
_5,000
P10,000
P 7,500
P2,500
3,167
P5,667
87
5-14: c
JJ
P 60,000
_18,000
_78,000
____40%
195,000
______
195,000
______
195,000
______
P195,000
Capital balances
Loan balances
Total interest
Divided by Profit and Loss Ratio
Loss Absorption balances
Priority I to LL
Balances
Priority II to LL, MM, 15:10
Balances
Priority II to KK, LL, MM, 35:15:10
Total
JJ
Priority I to LL (30,000 X 15%)
Priority II to LL (30,000 X 15%)
to MM (30,000 X 10%)
Priority II to KK (75,000 X 35%)
to LL (75,000 X 15%)
to MM (75,000 X 10%)
Total
______
P
BALANCES
KK
LL
MM
P 64,500
P 54,000
P 30,000
_30,000
______
______
_94,500
_54,000
_30,000
_____35%
_____15% _____10%
270,000
360,000
300,000
______
( 60,000)
______
270,000
300,000
300,000
______
( 30,000) ( 30,000)
270,000
270,000
270,000
( 75,000)
( 75,000) ( 75,000)
P195,000
P195,000
P195,000
CASH PAYMENT
KK
LL
9,000
4,500
1,750
11,250
______
______
P 1,750
P 24,750
MM
3,000
___7,500
P 10,500
Priority I to LL
Priority II to LL, MM, 15:10
Priority II to KK, LL, MM, 35:15:10
(29,100-16,500), 12,600
Cash distribution
JJ
_____
P
KK
MM
LL
P 9,000
4,500
3,000
TOTAL
P 9,000
7,500
__7,350
P 7,350
___3,150
P 16,650
__2,100
P 5,100
__12,600
P 29,100
ARCE
P 20,000
_10,000
_32,000
_____50%
64,000
______
64,000
______
P 64,000
BALANCES
BELLO
P 24,900
______
_24,900
_____30%
83,000
( 8,000)
75,000
( 11,000)
P 64,000
CRUZ
P 15,000
______
_15,000
_____20%
75,000
______
75,000
( 11,000)
P 64,000
5-15: a
Capital balances
Loan balances
Total interest
Divided by Profit and Loss Ratio
Loss Absorption balances
Priority I to Bello
Balances
Priority II to Bello & cruz, 3:2
Total
88
Chapter 5
CASH PAYMENTS
ARCE
BELLO
CRUZ
_____
2,400
3,300
_____
_2,200
Total
P 5,700
P2,200
5-16: a
Cash paid to Arce
Divide by Profit & Loss ratio
P2,000
_____5%
40,000
_7,900
47,900
20,000
Total
Less cash before realization
67,900
_6,000
P61,900
5-17: b
Cash distribution to Cruz
Divide by profit and loss ratio
P 6,200
2/5
15,500
3/5
9,300
__2,400
P11,700
5-18: b
BALANCES
MONZON
NIEVA
Total Interest
P22,500
P17,500
_____60%
_____40%
37,500
______
Total
P37,500
CASH PAYMENT
MONZON
NIEVA
43,750
( 6,250)
_____
_2,500
P37,500
P2,500
89
5-19: b
Cash distribution
PI to Nieva (2,500-2,000)
Balances, 6:40
Cash distribution
CASH MONZON
P12,500
( 500)
_12,000
__7,200
P
P 7,200
5-20: a
Cash before liquidation
June: Cash realized
Payment to creditor
Payment to Partners
Cash balances, June 30
July: Cash realized
Payment of liquidation expense
Payment to Partners
Cash balances, July 31
Aug: Cash realized
Cash distribution for August,
Profit and Loss ratio
Distribution to Partners - August
Monzon (22,500 X 60%)
Nieva (22,500 x 40%)
P 5,000
18,000
( 20,000)
__2,000
1,000
12,000
( 500)
( 12,500)
_22,500
P22,500
P13,500
P 9,000
NIEVA
500
_4,800
P5,300
90
Chapter 5
SOLUTIONS TO PROBLEMS
Problem 5 1
Suarez, Tulio and Umali
Statement of Liquidation
January 1 to april 31, 2013
Assets
Cash
Others Liabilities
Balances before liquidation.P 2,000.00 P46,000.00 P6,000.00
January Installment:
Realization of assets and
distribution of loss.... 10,500.00 ( 12,000.00) _______
Balances......................... 12,500.00 34,000.00 6,000.00
Payment of expenses of
realization and distribution
to partners ...................... ( 500.00) _______ _______
Balances......................... 12,000.00 34,000.00 6,000.00
Payment of liabilities ..... ( 6,000.00) _______ ( 6,000.00)
Balances......................... 6,000.00 34,000.00
Payments to partners
(Schedule 1) ............. ( 4,000.00) _______ _______
Balances......................... 2,000.00 34,000.00
February Installment:
Realization of assets and
distribution of loss.... 6,000.00 ( 7,000.00) _______
Balances......................... 8,000.00 27,000.00
Payment of expenses of
realization and distribution
to partners ...................... ( 750.00) _______ ______
Balances......................... 7,250.00 27,000.00
Payments to partners
(Schedule 2) ............. ( 6,000.00) _______ ______
Balances......................... 1,250.00 27,000.00
March Installment:
Realization of assets and
distribution of loss.... 10,000.00 ( 15,000.00)______
Balances......................... 11,250.00 12,000.00
Payment of expenses of
realization and distribution
to partners ...................... ( 600.00) _______ ______
Balances......................... 10,650.00 12,000.00
Payments to partners,
P & L ratio................( 10,150.00) ______
______
Balances.........................
500.00 12,000.00
April Installment:
Realization of assets and
distribution of loss.... 4,000.00 ( 12,000.00)______
Balances......................... 4,500.00
Payment of expenses of
realization and distribution
to partners ...................... _(400.00) ______
______
Balances......................... 4,100.00
Tulio,
Umali,
Partners' Capitals
Loan
Loan Suarez (40%) tulio (35%)Umali (25%)
P5,000.00 P2,500.00 P14,450.00 P12,550.00 P7,500.00
_______
______
5,000.00 2,500.00
( 600.00) ( 525.00)
13,850.00 12,025.00
( 375.00)
7,125.00
_______ _______
5,000.00 2,500.00
_______ _______
5,000.00 2,500.00
( 200.00)
13,650.00
_______
13,650.00
( 175.00)
11,850.00
________
11,850.00
( 125.00)
7,000.00
_______
7,000.00
( 3,812.50) ( 187.50)
1,187.50 2,312.50
_______
13,650.00
_______
11,850.00
_______
7,000.00
_______ _______
1,187.50 2,312.50
_______
1,187.50
_______
2,312.50
__(400.00) ( 350.00)
13,250.00 11,500.00
( 250.00)
6,750.00
( 300.00) ( 262.50)
12,950.00 11,237.50
( 187.50)
6,562.50
500.00
11,300.00
9,887.50
_______
6,562.50
______
______
500.00
______
_______
500.00
______
5,000.00
4,375.00
3,125.00
240.00) ( 210.00)
9,060.00
7,927.50
( 150.00)
5,162.50
______
______
______
_____
______
_____
91
Schedule 1
Suarez (40%)
Capital balances ......................................
P13,650.00
Loan balances..........................................
_____ _
Total interests..........................................
13,650.00
Possible loss (P2,000 + P34,000)...........
( 14,400.00)
Balances ..................................................
( 750.00)
Additional loss to Tulio and Umali 35:25
___750.00
Payments to partners ...............................
Apply to loan...........................................
__ __
Schedule 2
Capital balances ......................................
Loan balances..........................................
Total ........................................................
Possible loss (P1,250 + P27,000)...........
Payments to partners ...............................
Apply to loan...........................................
Apply to capital.......................................
Suarez (40%)
P12,950.00
12,950.00
( 11,300.00)
P 1,650.00
P 1,650.00
92
Chapter 5
Problem 5 2
Miller and Bell Partnership
Statement of Partnership Realization and Liquidation
Cash
25,000
40,000
Balances
Sale of inventory
Payment to
creditors
(10,000)
55,000
Payments to
partners
(Schedule 1)
(50,000)
5,000
Sale of inventory 30,000
Payment to
creditors
( 5,000)
30,000
Offset deficit
with loan
______
30,000
Payments to
partners:
Loan
( 6,000)
Capitals
(24,000)
Balances
0
Inventory
120,000
( 60,000)
Accounts
Payable
15,000
Bell
Loan
60,000
Capital
Miller
Bell
80%
20%
65,000
5,000
(16,000)
(4,000)
______
60,000
(10,000)
5,000
______
60,000
______
49,000
______
1,000
______
60,000
( 60,000)
______
5,000
(49,000)
11,000
_(1,000)
48,000
(24,000)
______
1,000
6,000)
______
0
( 5,000)
0
______
11,000
______
24,000
______
(5,000)
______
0
______
0
( 5,000)
6,000
______
24,000
(5,000)
0
______
0
______
0
( 6,000)
______
0
(24,000)
0
______
0
Schedule 1:
Miller and Bell Partnership
Schedule of Safe Payments to Partners
Miller
80%
49,000
(48,000)
1,000
Bell
20%
61,000
(12,000)
49,000
93
Problem 5 3
HORIZON PARTNERSHIP
Statement of realization and Liquidation
May July, 2013
Assets
Partners Capital
TT
(1/3)
Cash
Other
Liabilities
SS
(1/3)
20,000
75,000
280,000
(105,000)
80,000
______
60,000
(10,000)
70,000
(10,000)
90,000
(10,000)
Balances
Payment to creditors
95,000
(80,000)
175,000
______
80,000
(80,000)
50,000
______
60,000
______
80,000
______
Balances
Payments to PP (Exhibit A)
15,000
(15,000)
175,000
______
______
50,000
______
60,000
______
80,000
(15,000)
0
25,000
175,000
(61,000)
______
50,000
(12,000)
60,000
(12,000)
65,000
(12,000)
25,000
(25,000)
114,000
______
______
38,000
______
48,000
(10,000)
53,000
(15,000)
114,000
38,000
38,000
38,000
(114,000)
(11,000)
(11,000)
(11,000)
27,000
(27,000)
27,000
(27,000)
27,000
(27,000)
SS
TT
PP
60,000
1
60,000
70,000
1
70,000
90,000
1
90,000
______
______
(20,000)
Balances
June sale of assets at a loss of P36,000
Balances
Payment to partners (Exhibit A)
Balances
July sale of remaining assets at a loss of
P33,000
Balances
Payment to partners
81,000
81,000
(81,000)
PP
(1/3)
60,000
70,000
70,000
______
(10,000)
(10,000)
Balances
60,000
60,000
60,000
10,000
20,000
10,000
1/3
1/3
80,000
20,000
20,000
1/3
b. After the cash distribution in June, the partners capital accounts had balances corresponding to the income-sharing
ratio (38,000 each). From this point on any cash payments to partners may be made in the income-sharing ratio or
equally in this problem. In other words, after the creditors are paid and TT and PP receive 10,000 and 30,000,
respective, any additional cash that becomes available may be paid to the three partners equally.
94
Chapter 5
Problem 5 4
1. X, Y and Z
Cash Priority Program
January 1, 2013
Balances
Y
P60,000
22,5000
P45,000
15,000
P20,000
6,500
Total interests......................................
P82,500
P60,000
P26,500
P200,000
(35,000)
P132,500
165,000
(32,500)
165,000
(32,500)
Total.................................................... P132,500
P132,500
X (50%)
Cash Payments
Y (30%) Z (20%)
Total
P10,500
P10,500
132,500
________
P16,250
9,750
26,000
P132,500
P16,250
P20,250
P36,500
50%
30%
20%
100%
2. January
Cash
Available for distribution ..............................
Priority I to Y .............................................
Payment to partner.........................................
February.......................................................
Available for distribution ..............................
Priority I to Y (P10,500 P7,500) .............
Priority II to X and Y; 5:3 ..........................
Cash
P20,000
( 3,000)
( 17,000)
Payments to partners......................................
March ...........................................................
Available for distribution ..............................
Priority II to X and Y; 5:3
(P26,000 P17,000).................................
Excess; 5:3:2..................................................
Cash
P45,000
( 9,000)
( 36,000)
Payments to partners......................................
April..............................................................
Available for distribution ..............................
Excess; 5:3:2..................................................
Payments to partners......................................
P 7,500
( 7,500)
Cash
P15,000
( 15,000)
P 7,500
P 7,500
P10,625
P 3,000
6,375
_____
P10,625
P 9,375
P 5,625
18,000
P 3,375
10,800
P7,200
P23,625
P14,175
P7,200
P 7,500
P 4,500
P3,000
P 7,500
P 4,500
P3,000
95
Problem 5 5
AB, CD & EF Partnership
Statement of Partnership Realization and Liquidation
Capital
Able
Other Accounts CD
AB
CD
Cash
Loan
Assets Payable Loan
50%
30%
18,000 30,000 307,000 53,000 20,000 118,000 90,000
EF
20%
74,000
( 2,800)
( 400)
600
______
68,400
0
73,800
0
49,200
96
Chapter 5
Partnership
Schedules of Safe Payments to Partners
Schedule 1: January
Capital and loan balancesa
Possible loss:
Other assets (189,000) and possible liquidation
costs (10,000)
Balances
Absorption of AB's potential deficit balance
CD : (25,500 x 3/5 = 15,300)
EF : (25,500 x 2/5 = 10,200)
Safe payment
a = (104,000) capital less 30,000 loan receivable
= (81,600) capital plus 20,000 loan payable
= (68,400) capital
Schedule 2: February
Capital and loan balancesb
Possible loss:
Other assets (189,000) and possible liquidation
costs (6,000)
Absorption of AB's potential deficit balance
CD : (25,500 x 3/5 = 15,300)
EF : (25,500 x 2/5 = 10,200)
Safe payment
b = (102,000) capital less 30,000 loan receivable
= (73,800) capital
= (49,200) capital
AB
50%
CD
30%
EF
20%
P74,000
P101,600
P68,400
( 99,500)
( 25,500)
25,500
( 59,700)
41,900
( 39,800)
28,600
( 15,300)
_______
P 26,600
( 10,200)
P 18,400
______
P
-0-
72,000
( 97,500)
( 25,500)
25,500
_______
0
73,800
49,200
( 58,500)
15,300
( 39,000)
10,200
( 15,300)
________
0
( 10,200)
0
97
Problem 5 6
1.
M, N, O and P
Cash Priority Program
January 1, 2013
M
Capital balances.. P 70,000
Loan balances ..... 20,000
Total interests ..... P 90,000
Loss absorption
balances .........P240,000
Priority I to O .. _______
Balances ............. 240,000
Priority II to O
and P .............. _______
Balances ............. 240,000
Priority III to
M, O and P.....( 40,000)
Total ...................P200,000
Balances
N
O
P 70,000 P 30,000
5,000
25,000
P 75,000 P 55,000
P
P 20,000
15,000
P 35,000
Cash Payments
M (3/8) N (3/8) O (1/8)
P (1/8)
P20,000
5,000
3/8
5,000
P30,000
3/8
Total
P20,000
P5,000
10,000
5,000 25,000
P10,000 P55,000
1/8
1/8
8/8
2.
Schedule 1
Cash
P25,000
( 20,000)
( 5,000)
________
_______
P20,000
2,500
P2,500
P22,500
( 22,500)
2,500
( 2,500)
P15,000
3,750
P3,750
P 2,500
5,000
1,250
P2,500
5,000
1,250
18,750
( 18,750)
P3,750
( 3,750)
8,750
( 2,500)
P 6,250
8,750
( 8,750)
Payments to partners............................
Apply to loan .......................................
Apply to capital ...................................
Schedule 2
Cash
Available for distribution ....................
Priority II to O and P; 1:1 .................
Priority III to M, O and P; 3:1:1 .......
Excess, 3:3:1:1.....................................
Payments to partners............................
Apply to loan .......................................
Apply to capital
P40,000
( 5,000
( 25,000)
( 10,000)
98
Chapter 5
Problem 5 7
P45,000
P24,000
( 9,000)
36,000
______
24,000
P150,000
P120,000
( 30,000)
120,000
_______
120,000
______
55,000
( 10,000)
________
P110,000
( 10,000)
P110,000
_______
P 55,000
Accounts
Payable
Bronze
50%
Gold
30%
P37,500
P37,500
P 9,000
3,000
22,500
P34,500
( 3,000)
_______ _( 2,000)
P 33,000 P 22,000
Cash available
First
Next
Next
Additional paid in P&L ratio
P106,000
( 17,000)
( 9,000)
( 5,000)
( 75,000)
P
-0-
Silver
20%
P 17,000
_______
P 17,000
P 2,000
15,000
P17,000
99
Problem 5 8
Part A
North
Balances
South
East
West
North
P109,000 P 60,000
20%
40%
P545,000 P150,000
________
545,000
150,000
(145,000)
400,000
150,000
(250,000)
150,000
______
150,000
Cash Payments
South
East
33,500
14,500 29,000
(3)
Cash
North capital (30% x P103,000)
South capital (10%)
East capital (20%)
West capital (40%)
Property and equipment
To record sale of property and equipment.
82,000
150,000
30,900
10,300
20,600
41,200
253,000
North capital
31,800
South capital
58,600
East capital
35,000
West capital
15,200
Cash
140,600
To record cash installment to partners of P230,600 based on the cash distribution plan in Part A.
First P90,000 is held to pay liabilities (P74,000) and estimated liquidation expenses of P16,000.
Next P33,500 goes entirely to South.
Next P43,500 is split between to South (P14,500) and East (P29,000).
Remaining P63,600 is allocated to North (P31,800), South (P10,600) and East (P21,200)
(4)
Liabilities
Cash
To record payment of liabilities.
West
74,000
74,000
100
(5)
Chapter 5
Cash
North capital (30% of P30,000 loss)
South capital (10%)
East capital (20%)
West capital (40%)
Inventory
To record inventory sold.
71,000
9,000
3,000
6,000
12,000
101,000
(6)
North capital
35,500
South capital
11,833
East capital
23,667
Cash
71,000
To record distribution of cash according to cash distribution plan. Although P87,000 cash
is being held, P16,000 must be retained to pay liquidation expenses. The Remaining
P71,000 is divided among North, South, and East on a 30:20 basis.
(7)
(8)
11,000
3,300
1,100
2,200
4,400
North capital
South capital
East capital
Cash
To record final cash distribution.
4,160
North
P120,000
(4,920)
(30,900)
(31,800)
( 3,300)
South
P88,000
( 1,640)
(10,300)
(58,600)
( 1,100)
East
P109,000
( 3,280)
(20,600)
(50,200)
( 2,200)
West
P60,000
( 6,560)
(41,200)
0
( 4,400)
4,580
( 2,090)
1,527
( 693)
3,053
( 1,666)
( 4,160)
4,160
P 2,500
P 834
P 1,666
2,500
834
1,666
5,000
P 0
101
Problem 5 9
DR Company
Schedule of Safe Payments to Partners
Dan
(40%)
Red
(30%)
Ben
(30%)
(42,000)
9,600
4,800
(45,000)
7,200
3,600
(17,000)
7,200
3,600
(2,400)
(30,000)
(1,800)
(36,000)
(1,800)
(8,000)
19,200
1,600
(9,200)
14,400
1,200
(20,400)
14,400
1,200
7,600*
(7,600)
4,343
(4,857)
3,257
(17,143)
-0-
Of the P84,000 in cash at the end of August, P58,000 will be required to liquidate the debts to
outside creditors, and P4,000 must be held in reserve to pay possible liquidation costs. Thus, a
total of P22,000 in cash can be safely distributed to partners as of August 31, 2013.
Problem 5 10
(1)
40,000
60,000
100,000
60,000
10,000
180,000
50,000
200,000
102
(2)
Chapter 5
Jenny
P100,000
10,000
15,000
48,000
P173,000
Kenny
P200,000
20,000
20,000
72,000
P312,000
Explanation:
Each partner receives 10% on beginning capital balance. Each partner receives
her respective income (P15,000 to Jenny and P20,000 to Kenny). The amount distributed
thus far is P65,000. The remainder to be distributed is P120,000 (P185,000 30,000
35,000). Two-fifths of this remainder of P129,000 (48,000) is allocated to Jenny; 3/5 x
P120,000 (72,000) is allocated to Kenny. The total income allocated to Jenny and Kenny
is P73,000 and P112,000 respectively.
The admission of Lenny can now be recorded by the following entry:
Cash
175,000
Lenny, capital
Jenny, capital
Kenny, capital
110,000
26,000
39,000
Explanation:
The book value of the partnership after the income distribution in 2006 was
P485,000 (P173,000 + P312,000). After Lennys contribution, the value of the
partnership is P485,000 + P175,000 = P660,000. A one-sixth interest in the partnership is
P660,000 x 1/6 = P110,000. Using the bonus method, we compute a bonus of P175,000
P110,000 = P65,000. Using the 2:3 profit sharing ratio, the amount allocated to Jenny is
P26,000 (2/5 x P65,000) and the amount allocated to Kenny is P39,000 (3/5 x P65,000).
(3)
Jenny
P200,000
9,000
(156,000)
P 53,000
Kenny
P400,000
(50,000)
15,000
(260,000)
P105,000
Lenny
P200,000
6,000
(104,000)
P102,000
Explanation:
The sale of assets realized a gain of P30,000 (P210,000 P180,000) which is
distributed to the partners on the new profit sharing ratio: 30% to Jenny, 50% to Kenny,
and 20% to Lenny. Liabilities are paid. A possible loss on the unsold assets (P520,000) is
distributed to partners in their profit and loss ratio of 30:50:20 to Jenny, Kenny and
Lenny respectively.