# Chapter 5 Problem I 1 A B C and D Partnership Statement of...

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Chapter 5 Problem I 1. A, B, C and D Partnership Statement of Liquidation January 1, 20x4 to May 31, 20x4 Cash Non- Cash Assets Liabilitie s A, loan D, loan A, capital (40%) B, capital (20%) C, capital (20%) D, capital (20%) Balances before Liquidation 181,80 0 84,000 6,000 3,000 26,400 25,800 20,400 16,200 January - Realization - Payment of expenses - Payment of liabilities 72,000 (1,200) (66,00 0) (90,00 0) ______ (66,000 ) _____ _____ (7,200) ( 480) ______ (3,600) ( 240) ______ (3,600 ) ( 240 ) ______ (3,600) ( 240) ______ Balances after Jan 4,800 91,800 18,000 6,000 3,000 18,720 21,960 16,560 12,360 February - Realization - Payment of expenses - Payment of liabilities 21,600 (1,320) (18,00 0) (30,00 0) _______ (18,00 0) ______ ______ (3,360) ( 528) ______ (1,680) ( 264) _______ (1,680 ) ( 264 ) ______ (1,680) ( 264) ______ Balances before payment to partners 7,080 61,800 6,000 3,000 14,832 20,016 14,616 10,416 Payment to Partners (Sch. 1) ( 5,280 ) ______ ______ _____ ______ (5,280) ______ _____ Balances after February 1,800 61,800 6,000 3,000 14,832 14,736 14,616 10,416 March - Realization - Payment of expenses 19,200 ( 1,440 ) (24,00 0) ______ ______ _____ (1,920) ( 576) ( 960) ( 288) ( 960) ( 288 ) ( 960) ( 288) Balances before payment to partners 19,560 31,500 6,000 3,000 12,336 13,488 13,368 9,168 Payment to Partners (Sch. 2) (18,36 0) ______ (2,73 6) (3,000) (5,688) (5,568 ) (1,368) Balances after March 1,200 37,800 3,264 12,336 7,800 7,800 7,800 April - Realization - Payment of expenses 6,000 (4,800) (19,80 0) ______ (5,520) (1,920) (2, 760) ( 960) (2,760 ) ( 960) (2,760) ( 960) Balances before payment to partners 2,000 15,000 3,264 4,896 4,080 4,080 4,080 Payment to Partners (Note 1) (1,500) ______ ( 720) ( 360) ( 360) ( 360) Balances after April 500 18,000 2,554 4,896 3,720 3,720 3,720 May - Realization - Payment of expenses 2,400 ( 960) (18,00 0) _____ (6,240) ( 384) (3,120) ( 192) (3,120 ) (3,120) ( 192)

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( 192 ) Balances before Offsetting 1,440 2,554 ( 1,728 ) 408 408 408 Offset deficit vs. Loan ______ (1,72 8) 1,728 _____ ______ _____ Balances before payment 2,040 816 408 408 408 Payment to Partners (Note 2) (2,040) (816) (408) (408) (408) 2. A, B, C and D Partnership Schedule of Safe Payments Schedule 1 – February 28, 20x4 Computation of Distribution of Cash on February 28, 20x4 A, capital (40%) B, capital (20%) C, capital (20%) D, capital (20%) Balances before payment to partners: Loans 6,000 3,000 Capital 14,832 20,016 14,616 10,416 Total Interest 20,832 20,016 14,616 13,416 Restricted interest for possible losses: Unrealized non-cash assets P 61,800 Cash withheld 1,800 P 63,600 (25,44 0) (12,72 0) (12,72 0) (12,72 0) ( 4,60 8) 7,296 1,896 696 Restricted for possible insolvency of A (2:2:2) 4,608 (1,536) (1,536) (1,536) 5,760 360 ( 840) Restricted for possible insolvency of D (2:2) ( 420) ( 420) 840 5,340 ( 60) Restricted for possible insolvency of C ( 60) 60 Payment to partner (s) 5,280 Applied to: Loans -0- Capital 5,280 5,280 Schedule 2 – March 31, 20x4 Computation of Distribution of Cash on March 31, 20x4 A, capital (40%) B, capital (20%) C, capital (20%) D, capital (20%) Balances before payment to partners: Loans 6,000 3,000 Capital 12,336 13,488 13,488 9,168 Total Interest 18,336 13,488 13,488 12,168 Restricted interest for possible losses: Unrealized non-cash assets P 37,800 Cash withheld 1,200 P 39,000 (15,60 0) ( 7,800 ) ( 7,800 ) ( 7,800 ) 2,736 5,688 5,568 4,368 Applied to: Loans 2,736 -0- -0- 3,000
Capital ___-0- 5,688 5,568 1,368 2,736 5,688 5,568 4,368 3. T, U, V and W Partnership Cash Payment Priority Program* January 31, 20x4 Interests Payments T, capital (40%) U, capital (20%) V, capital (20%) W, capital (20%) T, capital (40%) U, capital (20%) V, capital (20%) W, capital (20%) Total Balances before liquidation: Loans 6,000 3,000 Capital 26,400 25,800 20,400 16,200 Total Interests 32,400 25,800 20,400 19,200 Divided by: P & L % __40% ___20% __20% __20% Loss Absorption Abilities 81,000 129,00 0 102,000 96,000 Priority I ______ (27,00 0) _______ _______ 5,400 5,400 81,000 102,00 0 102,000 96,000 Priority II ______ ( 6,000 ) ( 6,000) _______ 1,200 1,200 2,400 81,000 96,000 96,000 96,000 Priority III ______ (15,00 0) (15,000 ) (15,000 ) _______ 3,000 3,000 3,000 9,000 81,000 81,000 81,000 81,000 ____-0- 9,600 4,200 3,000 16,800 *also known as Schedule of Cash Distribution Plan / Pre-distribution Plan. 4. T, capital (40%) U, capital (20%) V, capital (20%) W, capital (20%) Total Interests P 32,400 P 25,800 P 20,400 P 19,200 Divided by: P & L % ____40% ____20% ____20% ____20% Loss Absorption Abilities P 81,000 P129,000 P 102,000 P 96,000 Order of Cash Distribution (4) (1) (2) (3) Vulnerability Rankings (1 Is most vulnerable) (1) (4) (3) (2) The vulnerability ranks indicate that partner T is most vulnerable to losses because his equity were reduced to zero with a partnership liquidation loss of P81,000. Partner U is

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• Winter '16
• gian catahum
• Balance Sheet, Payment, 1981, partner, 1970, 1977

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