CMPC131

SOLUTIONS:

 Ray , May and Jay Partnership:

Q: Capital of May after the 1st installment sale of the Non-cash assets?

REALIZATION ACCOUNT:

Particulars Amount Particulars Amount

Total Non-cash assets 250,000 By Liabilities 350,000
Total Cash By Cash- Sale of non-cash 205,000
assets
Liquidating expenses 20,000
Liabilities paid 150,000
Total Profit and loss
Ray (135,000 x 30%) 40,500
May (135,000 x 25%) 33,750
Jay (135,000 x 45%) 60,750
TOTAL 555,000 555,000

CAPITAL ACCOUNT OF MAY:

Particulars Amount Particular Amount
Total balance 483,750 By balance 450,000
By realization 33,750
Total of 1st installment of 483,750 483,750
May:

 NATHAN CONSTRUCTION:

Percentage of work completion = P 2,092,500 X 100

P 2,092,000 + 4,882,500

= P 2,092,000 X 100
P 6,975,000
= 30

Revenue Recognize 2020: Revenue 2,025,000

Cost of goods sold (3,557,400)
Total contract price P 6,750,000 Loss (1,532,400)
Multiply by: 30%
Revenue P 2,025,000

Loss recognized in 2020:

Total contract cost P 6,975,000

Less: cost incurred (2,092,000)
Total 4,883,000
Multiply by: 30%
Total 1,464,900
Add back: Cost incurred 2,092,500
Cost of goods sold P 3,557,400

 GEORGE CONSTRUCION:

Contract cost incurred is as follows:

Contract Price 30,000,000

Particulars 2020 2021
Percentage completion 20% 60%
Estimated cost at completion 22,500,000 24,000,000
Income recognize-cumulative 1,500,000 3,600,000
Revenue during the year 6,000,000 (22,500,000 X 20% + 16,800,000 (24,000,000 X 60% +
1,500,000) 2,400,000)
Gross/Profit income recognize for the 4,500,000 (6,000,000 – 1,500,000) 14,400,000 ( 16,800,000 – 2,400,000)
year
Cost incurred during year 1,500,000 2,400,000

 Compute for the cost of inventory in the hands of the consignee.

Cost of 24 pcs. Boys’ clothes P 4,800

Cost of 48 pcs. Underwear 7,680
Freight and handling cost:
Boys’ clothes 1,080
Underwear 2,000
Cost of inventory in hands of consignee: P 15,560

 LIQUIDATION OF JURY AND JOHN BOMBASTIX CO.

How much Is the net gain (loss) for the period?

Particulars Amount Particulars Amount

Assets to be realized 8,000,000 Assets Realized 4,720,000
Assets acquired 60,000 Assets not realized 880.000
Liabilities liquidated 8,520,000 Liabilities to be liquidated 11,480,000
Liabilities not liquidated 4,760,000 Liabilities Assumed 128,000
Supplementary Debits 100,000 Supplementary Credits 72,000
( Expenses) (Income)
Net loss 4,160,000
21,440,000 21,440,000

 DARRELL PUTIX CO.

Total Amount realized from assets = P 4,800,000 + 2,000,000

= P 6,800,000
Payment to secured creditors = P 400,000 + 80,000 + 4,000,000 + 200,000
= p 4,680,000

Amount for partially secured creditors = P 6,800,000 – 4,680,000

= P 2,120,000

Expected recover of partially secured creditor = P 2,120,000 X 100

P 3,200,000
= 66.25%

 VALLO, TYLER AND SYRIA:

How much would Syria receive (pay) during cash settlement?

Cash sales P 16,000

Credit sales 9,000
Stock taken by Syria 3,000
Less: Freight Inward (500)
Purchase (21,500)
Net Profit P 6,000

Profit / Partner = P 6,000

3
= P 2,000

Profit P 2,000
Less: Bad debt ( 16,000 – 15,000) 1,000
Payment to Syria P 1,000