Dona, Ella and Frey are partners in DEF Partnership with profit or loss sharing ratio of 6:1:3. Due to disagreement, the partners decided to liquidate their business with pre-liquidation statement of financial position presented below. What is the net proceeds from the sale of all noncash assets? P3,000,000 Liabilities to others17,000,000 Dona, CapitalElla, CapitalFrey, CapitalCashOther Noncash assetP10,000,0001,000,00004,000,0005,000,000The following additional notes are provided:All partners are legally declared to be personally insolvent.All noncash assets are sold during the liquidation process.Liquidation expenses amounting to P2M were paid.Ella receives a total of P2,500,000 at the end of liquidation.

Partnership is a form of organisation where two or more individuals starts a business to distribute…

Answered: Dona, Ella and Frey are partners in DEF…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dona, Ella and Frey are partners in DEF Partnership with profit or loss sharing ratio of 6:1:3. Due to disagreement, the partners decided to liquidate their business with pre-liquidation statement of financial position presented below. What is the net proceeds from the sale of all noncash assets?

P3,000,000 Liabilities to others
17,000,000 Dona, Capital
Ella, Capital
Frey, Capital
Cash
Other Noncash asset
P10,000,000
1,000,0000
4,000,000
5,000,000
The following additional notes are provided:
All partners are legally declared to be personally insolvent.
All noncash assets are sold during the liquidation process.
Liquidation expenses amounting to P2M were paid.
Ella receives a total of P2,500,000 at the end of liquidation.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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