The loan and capital account balances of Hannah, Jean, Jenifer and Kristine Partnership were as follows on October 26, 2020, the date that the partnership began liquidation: Debit Credit Loan, Hannah P20,000 Loan, Jenifer P35,000 Hannah, Capital – 20% 30,000 Jean, Capital – 30% 15,000 Jenifer, Capital – 10% 25,000 Kristine, Capital – 40% 40,000 Required: 1. Prepare a cash priority program. 2. Assume that P20,000 cash is available for the first distribution, determine the cash to be received by the partners. 3. In continuation with the preceding number, another P15,000 cash is available for the next distribution, determine the cash to be received by the partners. Required: Prepare a statement of liquidation with safe payments schedule.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
The loan and capital account balances of Hannah, Jean, Jenifer and Kristine
|
|
Debit |
Credit |
|
Loan, Hannah |
P20,000 |
|
|
Loan, Jenifer |
|
P35,000 |
|
Hannah, Capital – 20% |
|
30,000 |
|
Jean, Capital – 30% |
|
15,000 |
|
Jenifer, Capital – 10% |
25,000 |
|
|
Kristine, Capital – 40% |
|
40,000 |
Required:
1. Prepare a cash priority program.
2. Assume that P20,000 cash is available for the first distribution, determine the cash to be received by the partners.
3. In continuation with the preceding number, another P15,000 cash is available for the next distribution, determine the cash to be received by the partners.
Required: Prepare a statement of liquidation with safe payments schedule.
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