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RECONSTRUCTION OF INFORMATION 。 After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: Compute for the following. Loss on sales Share of Leni in the cash distribution to the partners Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni) 10

RECONSTRUCTION OF INFORMATION 。 After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: Compute for the following. Loss on sales Share of Leni in the cash distribution to the partners Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni) 10

FINANCIAL ACCOUNTING
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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RECONSTRUCTION OF INFORMATION o After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: ANK Compute for the following. Only this part Loss on sales > Share of Leni in the cash distribution to the partners > Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni)
Transcribed Image Text:RECONSTRUCTION OF INFORMATION o After all the assets (except the receivable from Leni) were realized and the liabilites to outside creditors were settled, Isko received P140,000 in the cash distribution to the partners. REQUIREMENT: ANK Compute for the following. Only this part Loss on sales > Share of Leni in the cash distribution to the partners > Cash available for distribution to the partners > Net proceeds from the sale of the non-cash assets (except the receivable from Leni)
CASE DISCUSSION: o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital - 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОТAL 500,000 ТОTAL 500.000 LUMP-SUM LIQUIDATION The non-cash assets were realized as follows: o 70% of the accounts receivable was collected; the balance is uncollectible o The entire Inventory was sold for P20,000 o P310,000 was received when the Equipment was sold o P12,000 liquidation expenses were paid. REQUIREMENT: Compute for the cash distributions to the partners. LUMP-SUM LIQUIDATION Collection from accounts receivable (60K x 70%) 42,000 20,000 310,000 Sale of inventory Sale of equipment Liquidation expenses Net proceeds Less: Carrying amt. of all non-cash assets, (12,000) 360.000 except Receivable from Leni (60K + 120K +290K) (470,000) (110,000) LOSS Leni (60%) 250.000 Isko ТОTAL (40%) Capital balance 450,000 200,000 20,000 Pavable to (Receivable from) partner Total (10,000) 240,000 10,000 220,000 (44.000) (110,000) 176,000 460,000 Allocation of loss -110K x 60% & 40% (66,000) 174.000 Amounts received by the partners 350.000 1 INSTALLMENT LIQUIDATION Lenki will be liquidated on installment basis. Cash distributions to the partners will be made as cash becomes available. In the first month of liquidation, the non-cash assets were realized as follows: o 50% of the accounts receivable were collected, and of the remaining balance, P10,000 is deemed worthless o 75% of the inventory was sold at 80% of cost o Equipment with carrying amount of P200,000 was sold for P185,000 o P12,000 liquidation expenses were paid. Additional P5,000 are expected to be incurred in the subsequent periods. REQUIREMENT: Compute for the cash distributions to the partners. INSTALLMENT LIQUIDATION Collection from accounts receivable (60K x 50%) 30,000 72,000 Sale of inventory (120K x 75% x 80%) Sale of equipment 185,000 Liquidation expenses Estimated future liquidation cost Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) (12,000) (5,000) 270,000 (470,000) (200,000) LOSS Leni (60%) 250.000 (10,000) 240.000 Isko (40%) 200,000 20,000 220,000 ΤΟTAL 450,000 Capital balance Payable to (Receivable from) partner Total 10,000 460,000 Allocation of loss (120,000) (80,000) (200,000) Amounts received by the partners 120,000 140,000 260,000 2
Transcribed Image Text:CASE DISCUSSION: o Leni and Isko are partners of Lenko Partnership which is currently liquidating. The firm's financial information is as follows: Cash 20,000 Accounts Payable 30,000 Accounts Receivable 60,000 Payable to Isko 20,000 Receivable from Leni 10,000 Leni, Capital - 60% 250,000 Inventory 120,000 Isko, Capital – 40% 200,000 Equipment, net 290,000 ТОТAL 500,000 ТОTAL 500.000 LUMP-SUM LIQUIDATION The non-cash assets were realized as follows: o 70% of the accounts receivable was collected; the balance is uncollectible o The entire Inventory was sold for P20,000 o P310,000 was received when the Equipment was sold o P12,000 liquidation expenses were paid. REQUIREMENT: Compute for the cash distributions to the partners. LUMP-SUM LIQUIDATION Collection from accounts receivable (60K x 70%) 42,000 20,000 310,000 Sale of inventory Sale of equipment Liquidation expenses Net proceeds Less: Carrying amt. of all non-cash assets, (12,000) 360.000 except Receivable from Leni (60K + 120K +290K) (470,000) (110,000) LOSS Leni (60%) 250.000 Isko ТОTAL (40%) Capital balance 450,000 200,000 20,000 Pavable to (Receivable from) partner Total (10,000) 240,000 10,000 220,000 (44.000) (110,000) 176,000 460,000 Allocation of loss -110K x 60% & 40% (66,000) 174.000 Amounts received by the partners 350.000 1 INSTALLMENT LIQUIDATION Lenki will be liquidated on installment basis. Cash distributions to the partners will be made as cash becomes available. In the first month of liquidation, the non-cash assets were realized as follows: o 50% of the accounts receivable were collected, and of the remaining balance, P10,000 is deemed worthless o 75% of the inventory was sold at 80% of cost o Equipment with carrying amount of P200,000 was sold for P185,000 o P12,000 liquidation expenses were paid. Additional P5,000 are expected to be incurred in the subsequent periods. REQUIREMENT: Compute for the cash distributions to the partners. INSTALLMENT LIQUIDATION Collection from accounts receivable (60K x 50%) 30,000 72,000 Sale of inventory (120K x 75% x 80%) Sale of equipment 185,000 Liquidation expenses Estimated future liquidation cost Net proceeds Less: Carrying amt. of all non-cash assets, except Receivable from Leni (60K + 120K +290K) (12,000) (5,000) 270,000 (470,000) (200,000) LOSS Leni (60%) 250.000 (10,000) 240.000 Isko (40%) 200,000 20,000 220,000 ΤΟTAL 450,000 Capital balance Payable to (Receivable from) partner Total 10,000 460,000 Allocation of loss (120,000) (80,000) (200,000) Amounts received by the partners 120,000 140,000 260,000 2
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