On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5. Total Assets 100,000 Total Liabilities 40,000 Lorna 10,000 Amy 20,000 Veronica. 30,000 On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit: • During the year, machinery was over depreciated by P15,000. • The net income for the year is overstated by P5,000. After the adjustment, Lorna received P15,000 for her capital interest. What is the capital of Amy after Lorna’s retirement? A. 27,500 B. 23,000 C. 21,875 D. 20,000

On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5. Total Assets 100,000 Total Liabilities 40,000 Lorna 10,000 Amy 20,000 Veronica. 30,000 On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit: • During the year, machinery was over depreciated by P15,000. • The net income for the year is overstated by P5,000. After the adjustment, Lorna received P15,000 for her capital interest. What is the capital of Amy after Lorna’s retirement? A. 27,500 B. 23,000 C. 21,875 D. 20,000

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter23: Accounting For Partnerships

Section: Chapter Questions

Problem 3AP

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On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5. Total Assets 100,000 Total Liabilities 40,000 Lorna 10,000 Amy 20,000 Veronica 30,000 On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit:• During the year, machinery was over depreciated by $15,000.• The net income for the year is overstated by $5,000.After the adjustment, Lorna received $15,000 for her capital interest.How much is the capital of Amy after Lorna’s retirement? A. 27,500 B. 23,000 C. 21,875 D. 20,000
The following balances as at October 31, 2016 for the Partnership of Kathy, Lilia and Minda were as follows: Cash P50,000 Non-cash assets 400,000 Liabilities 15,000 Kathy, Capital 127,500 Lilia, Capital 82,500 Minda, Capital 225,000 Kathy has decided to retire from the partnership on October 31. The estimated profit of October 31 is P100,000. Their profit and loss ratio is 3:3:4 to Kathy, Lilia and Minda, respectively. Required: - Compute for the Total Partners Equity after dissolution. - Compute New Capital Accounts of Remaining partner using Bonus Method and Revaluation Method under the following INDEPENDENT cases: a. Kathy will be paid by the partnership for P170,000 b. Kathy will be paid by the partnership for P100,000
Kim, Nicolas, and Troy are general partners in KNT Partnership sharing profits and losses in the ratio of 2:4:4, respectively. The partnership suffered financial distress and the partners decided to liquidate the partnership in December 2019. Accounts, after revaluation, adjustment, and correction, had the following ledger balances: Cash P 90,000 Accounts Receivable 205,000 Allowance for Doubtful Accounts 5,000 Merchandise Inventory 180,000 Equipment Accumulated Depreciation Equipment Accounts Payable Kim, Loan [Loan Payable - Kim] Troy, Loan [Loan Payable Troy] Kim, Capital Nicolas, Capital Troy, Capital 600,000 102,000 182,000 18,000 90,000 100,000 213,000 365,000 For the independent cases that follow in the course of winding up, prepare a statement of liquidation and necessary journal entries to record the liquidation process: A. The entire net receivable was collected, all inventories were sold at cost, and equipment was sold at its carrying value. B. Only 90% of net receivable was…
1.) On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5.Total Assets 100,000 Total Liabilities 40,000 Lorna 10,000 Amy 20,000 Veronica 30,000On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit:• During the year, machinery was over depreciated by P15,000.• The net income for the year is overstated by P5,000.After the adjustment, Lorna received P15,000 for her capital interest.What is the capital of Amy after Lorna’s retirement?A. 27,500 C. 21,875B. 23,000 D. 20,000 2.) The total of the partners’, capital accounts was P110,000 before the…
On January 1, the partners of Mori, Lux, and Khan (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: General Journal Cash Accounts receivable Inventory Machinery and equipment, net Mori, loan Accounts payable Lux, loan Mori, capital Lux, capital Khan, capital Totals Debit $32,000 94,000 80.0001 239,000 58.000 Credit $ 89,000 48,000 152,000 104,000 88,000 $481,000 $ 481,000 The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January February March Collected $65,000 of the accounts receivable; the balance is deemed uncollectible. Received $52,000 for the entire inventory. Paid $8,000 in liquidation expenses. Paid $72,000 to…
The following balances as at October 31, 2016 for the Partnership of Kathy , Lilia and Minda were as follows : Kathy , Capital 127,500 Lilia , Capital 82,500 Minda , Capital 225,000 Kathy has decided to retire from the partnership on October 31. Their profit and loss ratio is 3:3 :4 to Kathy , Lilia and Minda , respectively. Assumptions : A. The partnership will purchase the interest by paying 168,000 and no goodwill is to be recorded. B. The partnership will purchase the interest by paying 126, 000 and no goodwill is to be recorded C. The partnership will purchase the interest by paying 150, 000 and goodwill is to be recorded . Required: i. Table (like in the discussion ). ii. Entry upon retirement of Kathy. iii.Answers to the following questions: 1. What will be the total capital of the partnership upon Kathy's retirement? 2. What will be the new partnership sharing agreement? 3. What amount of capital will be debited / credited to Kathy upon Kathy's retirement? ( indicate…
Annie, Emy and Mary are in the process of liquidating their partnership and their account balance as of August 1, 2015 are as follows: Debit Credit Cash P 15 000 Non – cash assets 35 000 P 7 000 5 000 Emy, Loan Annie, Capital Emy, Capital Mary, Capital 17 500 20 500 The profit and loss sharing ratio has been 4:3:3 between Annie, Emy and Mary respectively. 1. Assuming that the partners hip realized P 15 000 from the sale of non – cash assets and that any deficiency is uncollectible, Emy must receive: а. Р 17000 b. Р 18500 с. Р9 500 d. Not given 2. If Annie had personal assets of P 25 000 and personal liabilities of P 22 500 and that the partnership realized P 12 500 from the sale of its non – cash assets, Mary must receive. а. Р 20 500 b. Р 12 500 с. Р 13 000 d. Not given
The partnership of Mara, Teri, and Rita has been suffering financial difficulty. financial position of Mara, Teri and Rita on this date is as follows: 1. Partners decided to liquidate. The condensed statement of Mara, Teri and Rita Partnership Statement of Financial Position December 31, 2018 Assets Liabilities and Capital Cash P 80,000 Accounts Payable 960,000 Mara, Capital Teri, Capital Rita, Capital P160,000 408,000 352,000 120,000 P1,040,000 Non-cash Assets P1,040,000 The profit and loss ratio is: Mara, 30%; Teri, 20% and Rita, 50%. Rita has no personal assets other than her interest in the partnership. The non-cash assets were sold for P640,000. Any deficient partner is insolvent, while the others are solvent. Required: (a) Prepare a statement of liquidation. (b) Prepare entries to record the liquidation of the partnership.
Show the solution in good accounting form Gerald, Julia and Bea are partners who decided to terminate their partnership due to misunderstanding.Total assets of the partnership is P480,000 including cash of P30,000. Capital balances of the partners were as follows Gerald P150,000; Julia P175,000, Bea P67,500. Unpaid liabilities amounted to P87,500. Assets with a book value of P175,000 were sold for P125,000 and the cash was distributed. The P/L ratio is 5:3:2 What amount must the remaining assets be sold in order for Julia to receive P197,500 after liquidation? *
S. Ahmed, Bola and Chukwu are sharing profits/losses in the ratio 2:2:1, decided to dissolve the partnership on 31/12/ with the Statement of financial position (or Balance Sheet) shown below: Ahmed, Bola & Chukwu Statement of Financial position at 30/12/2015 Non-Current Assets: Equipment Current Assets: Motor Vehicle Inventories Trade Receivables Bank balance N750000 375000 200000 112500 52500 Equity & Liabilities: Equity: Ahme* N975000 Bola 325000 Chukwu 50000 Ahmed - 17500 Bola (7500) Chukwu 5000 Creditors 75000 Loan-Bola- 50000 N1490000 Current account year ea Current Liabilities: N1490000 The partners were unable to sell the business as a going concern. They therefore disposed the assets separately fo following amounts:- Equipment N775000; Motor Vehicle N120000; Inventories N72500. Trade receivable puid in fu Trade Payables gave discount totaling N2500. Dissolution cost totaled N20000. Required: Prepare the necessary accounts to close the books of the partnership.
Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at that date stood as follows: iii. iv. ASSETS Non-current assets Buildings Furniture Statement of Financial Position as at 31 March Current assets Inventory Trade receivables Allowance for doubtful accounts A. Bank Total current assets Total assets EQUITY AND LIABILITIES Capital -Adjani Capital - Malcolm Capital - Shanice C. Current a/c - Adjani Current a/c - Malcolm Current a/c - Shanice Additional information: Long-Term Liabilities Loan Current Liabilities Creditors Required: Prepare the following: a. Buildings realized $180,000 b. Debtors $233, 600 c. Inventory $83,000 Realization account B. Partners' capital accounts $ Bank account 2020 i. Adjani took over the furniture at an agreed value of $10,000 ii. Of the remaining assets: 250,000 15,000 $ 50,000 200,000.00 3,000 12,000.00 212,000.00 83,000…
Partnership books showed net profit for the six months ended December 31, 2014 was P180,000.However, upon review of partnership records, the following errors were disclosed:a. Accrued expenses not recorded at year end- P6,000b. Income received in advance, not adjusted- P10,000c. Unused portion of 1 year insurance paid- P5,000.d. Income already earned, not yet recorded- P15,000.How much is the adjusted profits before profit distribution?a. 180,000b. 194,000c. 195,000d. 184,000