CHAPTER 5 - Partnership Liquidation by Installment 83...

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Partnership Liquidation by Installment 83 CHAPTER 5 MULTIPLE CHOICE ANSWERS AND SOLUTIONS 5-1: b RJ SJ TJ Capital balances before liquidation P22,000 P30,000 P 8,000 Loan balances _10,000 ______– ______– Total interest 32,000 30,000 8,000 Possible loss (40,000+10,000) ( 25,000 ) ( 15,000 ) ( 10,000 ) Balances 7,000 15,000 ( 2,000) Additional loss to RJ & SJ, 5:3 ( 1,250 ) ( 750 ) __2,000 Cash distribution P 5,750 P14,250 P 5-2: a AR BR CR DR Capital balances P 5,500 P 5,150 P 6,850 P 4,500 Loan balances _1,000 _____– _____– _____– Total interest 6,500 5,150 6,850 4,500 Possible loss (23,000-6,000) ( 6,800 ) ( 5,100 ) ( 3,400 ) ( 1,700 ) Balances ( 300) 50 3,450 2,800 Additional loss to BR, CR, DR, 3:2:1 ___300 ( 150 ) ( 100 ) ( 50 ) Balances ( 100) 3,350 2,750 Additional loss to CR & DR, 2:1 _____– ___100 _( 67 ) _( 33 ) Payment to partners P P P 3,283 P 2,717 Total liabilities P 1,000 Total Capital _22,000 Total Assets P23,000 5-3: c B A L A N C E S DD EE FF GG Capital balances P40,000 P30,000 P15,000 P25,000 Loan balances 5,000 10,000 Advances _____– _____– ( 4,500 ) ( 2, 500 ) Total interest 45,000 40,000 10,500 22,500 Divided by P/L Ratio ____50 % ____30 % ____10 % ____10 % Loss Absorption balances 90,000 133,333 105,000
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225,000 PI - TO GG _____– _____– ( 91,667 ) __ __– Balances 90,000 133,333 105,000 133,333 PII - TO EE & GG, 30:10 _____– ( 28,333 ) _____– ( 28,333 ) Balances 90,000 105,000 105,000 10,500 PIII - TO EE, FF, GG, 3:1:1 _____– (15,000 ) ( 15,000 ) ( 15,000 ) Balances P90,000 P90,000 P90,000 P90,000 PIV - P/L Ratio 84 Chapter 5 CASH PAYMENT DD EE FF GG PI - To GG P 9,167 PII - To EE (28,833 X 30%) P 8,433 GG (28,833 X 10%) – 2,833 PIII –To EE (15,000 X 30%) 4,500 FF (15,000 X 10%) 1,500 GG (15,000 X 10%) _____– _____– _____– __1,500 Total P12,933 P 1,500 P13,500 PIV - P/L Ratio DD EE FF GG Distribution of P18,000 PI - TO GG P 9,167 PII - TO EE & GG, 3:1, P8,833 _____– _6,625 _____– __2,208 Cash distribution P 6,625 P11,375 5-4: a TAN LIM WAN Capital balances before liquidation P40,000 P65,000 P48,000 Loss on realization, P40,000 ( 16,000 ) ( 16,000 ) ( 8,000 ) Capital balances before cash distribution 24,000 49,000 40,000 Possible loss, P90,000 ( 36,000 ) ( 36,000 ) ( 18,000 ) Balances ( 12,000) 13,000 22,000 Additional loss to Lim & Wan, 4:2 _12,000 ( 8,000 ) ( 4,000 ) Cash distribution P P 5,000 P18,000 5-5: b
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TAN LIM WAN Capital balances before cash distribution P24,000 P49,000 P40,000 Possible loss (90,000+3,000) ( 37,200 ) ( 18,600 ) ( 18,600 ) Balances ( 13,200) 30,400 21,400 Additional loss to Lim & Wan, 4:2 _13,200 ( 8,800 ) _( 4,400 ) Cash distribution P P21,600 P17,000 5-6: d Tan (14,000 X 40%) P5,600 Lim (14,000 X 40%) P5,600 Wan (14,000 X 20%) P2,800 5-7: a CARPIO LOBO Capital balances before liquidation P72,000 P54,000 Goodwill written-off ( 5,000 ) ( 5,000 ) Cash balance 67,000 49,000 Possible loss (100,000+10,000), 110,000 ( 55,000 ) ( 55,000 ) Capital balances before liquidation 12,000 ( 6,000) Additional loss to Carpio ( 6,000 ) __6,000 Cash distribution P 6,000 P Partnership Liquidation by Installment 85 5-8: d JACOB SANTOS HERVAS Capital balances before liquidation P40,000 P72,000 P 7,000 Loss on realization (120,000-90,000) ( 15,000) ( 9,000) ( 6,000) Liquidation expenses, P2,000 ( 1,000 ) ( 600) ( 400) Capital balances before cash distribution 24,000 62,400 63,600 Loan balances __8,000 _____– _____– Total interest 32,000 62,400 63,600 Possible Loss (210,000-120,000) ( 45,000 ) 27,000 ( 18,000 ) Balances ( 13,000) 35,400 45,600 Additional loss to Santos & Hervas _13,000 ( 7,800 ) ( 5,200 ) Cash distribution P P27,600 P40,400 5-9: d A B C D Capital balances before liquidation P16,200 P12,000 P37,700 P17,700 Salary payable– _____– ___160 ___240
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_______ Balances 16,200 12,000 37,860( 17,9 40) Loss on realization (P2,400) ( 600 ) ( 600 ) ( 600 ) ( 600 ) Balances 15,600 11,400 37,260 17,340 Liquidation expenses (P600) ( 150 ) ( 150 ) ( 150 ) ( 150 ) Balances 15,450 11,250 37,110 17,190 Loan balances 12,000 14,400 _____– __9,600 Total interest 27,450 25,650 37,110 26,790 Possible Loss (126,000-18,000) ( 27,000 ) ( 27,000 ) ( 27,000 ) ( 27,000 ) Balances 450 ( 1,350) 10,110( 21 0) Additional loss to A & C ( 780 ) __1,350 ( 780 ) ____210 Balances ( 330) 9,330 Additional loss to C ___330 _____– ( 330 ) _____– Cash distribution P P P 9,000 P 5-10: a BALANCES DY SY LEE Total interest P22,000 P15,500 P14,000 Profit and Loss ratio 2/4 1/4 1/4 Loan absorption balances 44,000 62,000 56,000 Priority I - to Sy _____– ( 6,000 ) _____– Balances 44,000 56,000 56,000
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