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    Mikka Aniciete
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    The document contains information about the liquidation of a partnership. It provides details of the sale of other assets, payment of liabilities, distribution of gains/losses to partners' capital accounts, and final cash payments to partners over four cases with varying sale amounts and gains/losses. In each case, other assets are sold, liabilities are paid, capital account balances are adjusted for gains/losses, and remaining cash is distributed to partners.

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    For CASE TO D answers. See attached

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    Exercises Case A-E -accounting and finance 2

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    The document contains information about the liquidation of a partnership. It provides details of the sale of other assets, payment of liabilities, distribution of gains/losses to partners' capital accounts, and final cash payments to partners over four cases with varying sale amounts and gains/losses. In each case, other assets are sold, liabilities are paid, capital account balances are adjusted for gains/losses, and remaining cash is distributed to partners.

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    © All Rights Reserved
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    19 views14 pages

    Exercises Case A-E - Accounting and Finance 2

    Uploaded by

    Mikka Aniciete
    The document contains information about the liquidation of a partnership. It provides details of the sale of other assets, payment of liabilities, distribution of gains/losses to partners' capital accounts, and final cash payments to partners over four cases with varying sale amounts and gains/losses. In each case, other assets are sold, liabilities are paid, capital account balances are adjusted for gains/losses, and remaining cash is distributed to partners.

    Copyright:

    © All Rights Reserved
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    of 14

    Case A. Other assets were sold for P700,000.

    There is a gain on realization of P20,000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 700,000.00 (680,000.00)
    Balances 740,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 516,000.00
    C. Payment to Partners (516,000.00)

    Entries
    A. Sale of other assets and distribution of gain
    Cash 700,000.00
    Other assets 680,000.00
    Bob,Capital 8,000.00
    Gary,Capital 8,000.00
    Crab,Capital 4,000.00

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Payment to partners
    Gary,loan 10,000.00
    Crab,loan 16,000.00
    Bob,capital 198,000.00
    Gary,capital 128,000.00
    Crab,capital 164,000.00
    Cash 516,000.00

    Schedule of cash distribution to partners


    King Jolly Donald
    Capital balances -
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    8,000.00 8,000.00 4,000.00
    10,000.00 16,000.00 198,000.00 128,000.00 164,000.00

    10,000.00 16,000.00 198,000.00 128,000.00 164,000.00


    (10,000.00) (16,000.00) (198,000.00) (128,000.00) (164,000.00)
    Case B. Other assets were sold for P500,000. There is a loss on realization of P180,000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 500,000.00 (680,000.00)
    Balances 540,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 316,000.00
    C. Payment to Partners (316,000.00)

    Entries
    A. Sale of other assets and distribution of gain
    Cash 500,000.00
    Other assets 680,000.00
    Bob,Capital (72,000.00)
    Gary,Capital (72,000.00)
    Crab,Capital (36,000.00)

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Payment to partners
    Gary,loan 10,000.00
    Crab,loan 16,000.00
    Bob,capital 118,000.00
    Gary,capital 48,000.00
    Crab,capital 124,000.00
    Cash 316,000.00
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    (72,000.00) (72,000.00) (36,000.00)
    10,000.00 16,000.00 118,000.00 48,000.00 124,000.00

    10,000.00 16,000.00 118,000.00 48,000.00 124,000.00


    (10,000.00) (16,000.00) (118,000.00) (48,000.00) (124,000.00)
    Case C. Other assets were sold for P370,000. There is a loss on realization of P310,000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 370,000.00 (680,000.00)
    Balances 410,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 186,000.00
    C. offset Gary,loan to Gary’s capital deficiency
    Balances 186,000.00
    D. Payment to Partners 186,000.00

    Entries
    A. Sale of other assets and distribution of gain
    Cash 370,000.00
    Bob,capital 124,000.00
    Gary,capital 124,000.00
    Crab,capital 62,000.00
    Other assets 680,000.00

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Offset
    Gary,Loan 4,000.00
    Gary,capital 4,000.00

    D. Payment to partners
    Gary,loan 6,000.00
    Crab,loan 16,000.00
    Bob,capital 66,000.00
    Crab,capital 98,000.00
    Cash 186,000.00
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    (124,000.00) (124,000.00) (62,000.00)
    10,000.00 16,000.00 66,000.00 (4,000.00) 98,000.00

    10,000.00 16,000.00 66,000.00 (4,000.00) 98,000.00


    (4,000.00) 4,000.00
    6,000.00 16,000.00 66,000.00 98,000.00
    (6,000.00) (16,000.00) (66,000.00) (98,000.00)
    Case D. Other assets were sold for P340,000. There is a loss on realization of P40,000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 340,000.00 (680,000.00)
    Balances 380,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 156,000.00
    C. Offset Gary, Loan to Gary’s Capital deficiency
    Balances 156,000.00
    D. Additional Investment of Gary 6,000.00
    Balances 162,000.00
    E. Payment to Partners 156,000.00

    Entries
    A. Sale of other assets and distribution of gain
    Cash 340,000.00
    Bob,capital 136,000.00
    Gary,capital 136,000.00
    Crab,capital 68,000.00
    Other assets 680,000.00

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Offset
    Gary,Loan 10,000.00
    Gary,Capital 10,000.00

    D. Additional investment
    Cash 6,000.00
    Gary,capital 6,000.00

    E. Payment to partners
    Gary,loan -
    Crab,loan 16,000.00
    Bob,capital 54,000.00
    Crab,capital 92,000.00
    Cash 156,000.00
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    (136,000.00) (136,000.00) (68,000.00)
    10,000.00 16,000.00 54,000.00 (16,000.00) 92,000.00

    10,000.00 16,000.00 54,000.00 (16,000.00) 92,000.00


    (10,000.00) 10,000.00
    - 16,000.00 54,000.00 (6,000.00) 92,000.00
    6,000.00
    16,000.00 54,000.00 92,000.00
    (10,000.00) (16,000.00) (54,000.00) (92,000.00)
    Case E. Other assets were sold for P250,000. There is a loss on realization of P430,000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 250,000.00 (680,000.00)
    Balances 290,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 66,000.00
    C. offset Gary, Loan to Gary’s deficiency
    Balances 66,000.00
    D. Additional investment of Gary 42,000.00
    Balances 108,000.00
    E. Payment to Partners 108,000.00

    Entries
    A. Sale of other assets and distribution of gain
    Cash 250,000.00
    Bob,capital 172,000.00
    Gary,capital 172,000.00
    Crab,capital 86,000.00
    Other assets 680,000.00

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Offset
    Gary, Loan 10,000.00
    Gary,Capital 1,000.00

    D. Additional investment
    Cash 42,000.00
    Gary,capital 42,000.00

    E. Payment to partners
    Crab,loan 16,000.00
    Bob,capital 18,000.00
    Crab,capital 74,000.00
    Cash 108,000.00
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    (172,000.00) (172,000.00) (86,000.00)
    10,000.00 16,000.00 18,000.00 (52,000.00) 74,000.00

    10,000.00 16,000.00 18,000.00 (52,000.00) 74,000.00


    (10,000.00) 10,000.00
    - 16,000.00 18,000.00 (42,000.00) 74,000.00
    42,000.00
    16,000.00 18,000.00 74,000.00
    (16,000.00) (18,000.00) (74,000.00)
    Case F. Other assets were sold for P180,000. There is a loss on realization of P500000

    Cash Other Assets Liabilities


    Profit and Loss Ratio
    Balances before liquidation 40,000.00 680,000.00 224,000.00
    A. Realization and distribution of gain 180,000.00 (680,000.00)
    Balances 220,000.00 224,000.00
    Offset, Loan to Deficiencies
    Balances 220,000.00 224,000.00
    adcitional investment of Bob and Gary 80,000.00
    Balances 300,000.00 224,000.00
    B. Payment of Liabilities 224,000.00 (224,000.00)
    Balances 76,000.00
    C. offset Gary, Loan to Gary’s deficiency
    Balances 76,000.00
    D. Additional investment of Gary
    Balances 76,000.00
    E. Payment to Partners 76,000.00

    Entries
    A. Sale of other assets and distribution of gain
    Cash 250,000.00
    Bob,capital 172,000.00
    Gary,capital 172,000.00
    Crab,capital 86,000.00
    Other assets 680,000.00

    B. Payment of Liabilities
    Liabilities 224,000.00
    Cash 224,000.00

    C. Offset
    Gary, Loan 10,000.00
    Gary,Capital 1,000.00

    D. Additional investment
    Cash 42,000.00
    Gary,capital 42,000.00

    E. Payment to partners
    Crab,loan 16,000.00
    Bob,capital -
    Crab,capital 60,000.00
    Cash 76,000.00
    Loan Capital
    Gary Crab Bob Gary Crab
    4 4 2
    10,000.00 16,000.00 190,000.00 120,000.00 160,000.00
    (200,000.00) (200,000.00) (100,000.00)
    10,000.00 16,000.00 (10,000.00) (80,000.00) 60,000.00
    (10,000.00) 10,000.00
    - 16,000.00 - (80,000.00) 60,000.00
    80,000.00
    16,000.00 - - 60,000.00

    16,000.00 60,000.00

    16,000.00 60,000.00

    16,000.00 60,000.00
    (16,000.00) (60,000.00)
    Assets
    Cash 1,000.00 1 64,000.00 The credit balance of the allwan
    Accounts receivable 80,000.00 accounts receivable to g
    Less: allowance for bad debts 20,000.00 60,000.00
    Merchandise inventory 50,000.00 2 (25,000.00)
    Prepaid advertising 2,000.00 3 (800.00) +
    Office equipment 100,000.00
    Less: accumulated depreciation 60,000.00 40,000.00 4 (16,000.00)
    153,000.00 Book value = AC - AD

    Liabilities and equity


    Accounts payable 20,000.00 5 2,000.00
    Notes payable 86,000.00 6 1,000.00
    Atoy,capital 30,000.00 2 (10,000.00) 3 (320.00) 4
    Bogs,capital 17,000.00 (15,000.00) (480.00)
    Total liabilities and equity 153,000.00

    Adjustments
    Asset
    Cash 65,000.00
    Accounts receivable
    Add: allowance for bad debts 16,000.00 16,000.00
    Merchandise inventory 25,000.00
    Prepaid advertising 1,200.00
    Office equipment
    Less: accumulated depreciation 24,000.00
    131,200.00

    Liabilities and equity


    Accounts payable 22,000.00
    Notes payable 87,000.00
    Atoy,capital 47,920.00
    Bogs,capital 43,880.00
    Total liabilities and equity 200,800.00
    redit balance of the allwance for doubtful accounts is combined with the debit balance of
    accounts receivable to get the carrying amount of your company’s receivables.

    60,000.00
    (20K * 20%)
    64,000.00

    alue = AC - AD
    100,000.00 40,000.00 (40,000.00)
    (60,000.00) 60% 24,000.00
    40,000.00 24,000.00 (16,000.00)

    (6,400.00) 5 (800.00) 6 (400.00)


    (9,600.00) (1,200.00) (600.00)

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