Reviewer in Advanced Accounting Items 1 and 2 are based on the following dataOn December 31, 2005, the accounting records of the STU Partnership included the followingledger account balances:(Dr) CrSy, drawingP(24,000)Uy, drawing(9,000)Ty, loan30,000Sy, capital123,000Ty, capital100,500Uy, capital108,000Total assets of the partnership amounted to P478,500, including P52,500 cash. The partnershipwas liquidated on December 31, 2005 and uy received P83,250 cash pursuant to the liquidation.Sy, Ty, and uy shared income and losses in a 5:3:2 ratios, respectively.1.How much is the loss on realization of assets? a.P178,750b.P78,750c.P23,750d.P123,750 2.How much cash is received by Sy? Ans. B B 3.Pepe and Pilar started a partnership some years ago and managed to operate profitably forseveral years. Recently, however, they lost a substantial legel suit and incurred unexpected losseson accounts receivable and inventories. As a result, they decided to liquidate. They sold all assetsand only P162,000 was available to pay liabilities, which amounted to P297,000. Their capitalaccount balances before the liquidationand their profit and loss sharing ratios are shown below:
Capital BalancesProfit and Loss ratiosPepeP207,00060%PilarP121,50040%Pepe is personally insolvent after investing cash to pay the unpaid creditors, but Pilar haspersonal assets in excess of P900,000.In the settlement to partners, how much cash should Pepe receive? A 4.Apo Suuply Company is engaged in merchandising both at its Home Office inMakati and its Branch in Davao City. Selected accounts taken from the trialbalances of the Home Office and the branch as of December 31, 2005 follow:DebitsMakatiBranchInventory, Jan. 1, 2005P 23,000P 11,550Davao Branch58,300-Purchases190,000105,000Freight in from Home Office-5,500Sundry expenses52,00028,000CreditsHome OfficeP -P 53,300Sales155,000140,000Sales to Branch110,000-Allowance for Overvaluation of Branch Inventory at Jan. 1, 20051,000-Additional information:-The Davao City branch gets all of its merchandise from the home office. Thehome office bills the goods at cost plus a 10% mark-up. At December 31,2005, a shipment with a billed value of P 5,000 was still in transit. Freight onthis shipment was P 250 and is to be treated as part of the inventory. -Inventories on December 31, 2005 excluding the shipment in transit, follow:
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