TOPIC: LUMPSUM LIDUATION (PARTNERSHIP) SHOW YOUR COMPUTATION, 1. Jack, Jill, Dick and Jane are partners with capitals of P 22,000, P 20,600, P 27,400 and P 18,000 respectively. Jack has a loan balance of P 4,000. Profits and losses are shared 40%; 30%; 20%; 10% by Jack, Jill, Dick and Jane respectively. Assuming assets were sold and liabilities paid and the balance of cash showed P 24,000.
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.
TOPIC: LUMPSUM LIDUATION (
SHOW YOUR COMPUTATION,
1. Jack, Jill, Dick and Jane are partners with capitals of P 22,000, P 20,600, P 27,400 and P 18,000 respectively. Jack has a loan balance of P 4,000.
2. The partnership accounts of Guess, Jag and Levis are shown below as of December 31, 2019. Profits and losses are shared 50%; 30%; and 20%, respectively.
|
Guess, Drawing (debit balance) |
P (32,000) |
|
Levis, Drawing (debit balance) |
(12,000) |
|
Jag, Loan |
40,000 |
|
Guess, Capital |
164,000 |
|
Jag, Capital |
134,000 |
|
Levis, Capital |
144,000 |
Total assets amounted to P 638,000, including cash of P 70,000, and P 200,000 worth of liabilities. On January 2019, the partnership was liquidated, and Jag received P 111,000 cash as final settlement. Questions/Requirements for number 2: (2a) What is the total loss of the partnership? (2b) Prepare and show the statment of liquidation (2c) Show the
3. Red, White, and Blue are partners who share profits and losses 20%; 30%; and 50% respectively. The partners have decided to liquidate the partnership. Their capital accounts show the following balances: Red – P 60,000 credit; White – P 90,000 credit; Blue – P 30,000 debit. What is the amount of cash available for distribution?
4. Orange and Lemon share profits and losses equally. They decided to liquidate their partnership when their net assets amounted to P 260,000. Capital balances were P 170,000 and P 90,000, respectively. If the non-cash assets were sold for an amount equal to book value, what amount of cash should Orange and Lemon respectively received?
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