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  • FAR-Chapter 4 Problems-Solutions

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    Cheska Agrabio
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    The document presents the statement of liquidation for the partnership of Arenas, Dulay and Laurente as of June 30, 2019. It shows the balances before liquidation, the sale of non-cash assets and distribution of gains, payment of liabilities, and final payment and balances for the partners. Upon liquidation, Arenas' capital was $1,000,000, Dulay's was $600,000, and Laurente's was $700,000.

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    FAR Chapter 4

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    The document presents the statement of liquidation for the partnership of Arenas, Dulay and Laurente as of June 30, 2019. It shows the balances before liquidation, the sale of non-cash assets and distribution of gains, payment of liabilities, and final payment and balances for the partners. Upon liquidation, Arenas' capital was $1,000,000, Dulay's was $600,000, and Laurente's was $700,000.

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    © All Rights Reserved
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    161 views24 pages

    FAR-Chapter 4 Problems-Solutions

    Uploaded by

    Cheska Agrabio
    The document presents the statement of liquidation for the partnership of Arenas, Dulay and Laurente as of June 30, 2019. It shows the balances before liquidation, the sale of non-cash assets and distribution of gains, payment of liabilities, and final payment and balances for the partners. Upon liquidation, Arenas' capital was $1,000,000, Dulay's was $600,000, and Laurente's was $700,000.

    Copyright:

    © All Rights Reserved
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    of 24

    Problem 1

    Arenas, Dulay and Laurente


    Statement of Liquidation
    June 30, 2019

    Cash NonCash Assets Liabilities


    P/L Ratio
    Balances before Liquidation ( 50,000.00) ( 2,350,000.00) ( 400,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 2,650,000.00) ( (2,350,000.00)
    Balances ( 2,700,000.00) ( -  ) ( 400,000.00)
    Payment of Liabilities ( (400,000.00) ( (400,000.00)
    Balances ( 2,300,000.00) ( -  ) ( -  )
    Payment to Partners ( (230,000.00)

    Cash ( 2,650,000.00)
    Noncash Assets ( 2,350,000.00)
    Arenas, capital ( 100,000.00)
    Dulay, capital ( 100,000.00)
    Laurente, capital ( 100,000.00)

    Liabilities ( 400,000.00)
    Cash ( 400,000.00)

    Arenas, capital ( 1,000,000.00)


    Dulay, capital ( 600,000.00)
    Laurente, capital ( 700,000.00)
    Cash ( 2,300,000.00)
    nd Laurente
    quidation
    2019

    Arenas, Capital Dulay, Capital Laurente, Capital


    1/3 1/3 1/3
    ( 900,000.00) ( 500,000.00) ( 600,000.00)

    ( 100,000.00) ( 100,000.00) ( 100,000.00)


    ( 1,000,000.00) ( 600,000.00) ( 700,000.00)

    ( 1,000,000.00) ( 600,000.00) ( 700,000.00)


    ( (1,000,000.00) ( (600,000.00) ( (700,000.00)
    Problem 1
    Arenas, Dulay and Laurente
    Statement of Liquidation
    June 30, 2019

    Cash NonCash Assets Liabilities


    P/L Ratio
    Balances before Liquidation ( 50,000.00) ( 2,350,000.00) ( 400,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 2,650,000.00) ( (2,350,000.00)
    Balances ( 2,700,000.00) ( -  ) ( 400,000.00)
    Payment of Liabilities ( (400,000.00) ( (400,000.00)
    Balances ( 2,300,000.00) ( -  ) ( -  )
    Payment to Partners ( (2,300,000.00)
    ( -  ) ( -  ) ( -  )

    Cash ( 2,650,000.00)
    Noncash Assets ( 2,350,000.00)
    Arenas, capital ( 100,000.00)
    Dulay, capital ( 100,000.00)
    Laurente, capital ( 100,000.00)

    Liabilities ( 400,000.00)
    Cash ( 400,000.00)

    Arenas, capital ( 1,000,000.00)


    Dulay, capital ( 600,000.00)
    Laurente, capital ( 700,000.00)
    Cash ( 2,300,000.00)
    nd Laurente
    quidation
    2019

    Arenas, Capital Dulay, Capital Laurente, Capital


    1/3 1/3 1/3
    ( 900,000.00) ( 500,000.00) ( 600,000.00)

    ( 100,000.00) ( 100,000.00) ( 100,000.00)


    ( 1,000,000.00) ( 600,000.00) ( 700,000.00)

    ( 1,000,000.00) ( 600,000.00) ( 700,000.00)


    ( (1,000,000.00) ( (600,000.00) ( (700,000.00)
    ( -  ) ( -  ) ( -  )
    Problem 2
    Miranda, Leon and Estoque
    Statement of Liquidation
    March 31, 2019

    Cash NonCash Assets Liabilities


    P/L Ratio
    Balances before Liquidation ( 150,000.00) ( 2,600,000.00) ( 750,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 2,150,000.00) ( (2,600,000.00)
    Balances ( 2,300,000.00) ( -  ) ( 750,000.00)
    Payment of Liabilities ( (750,000.00) ( (750,000.00)
    Balances ( 1,550,000.00) ( -  ) ( -  )
    Payment to Partners ( (1,550,000.00)

    Cash ( 2,150,000.00)
    Miranda, capital ( 150,000.00)
    LEon, capital ( 150,000.00)
    Estoque, capital ( 150,000.00)
    Noncash Assets ( 2,600,000.00)

    Liabilities ( 750,000.00)
    Cash ( 750,000.00)

    Miranda, capital ( 250,000.00)


    Leon, capital ( 450,000.00)
    Estoque, capital ( 850,000.00)
    Cash ( 1,550,000.00)
    nd Estoque
    quidation
    2019

    Miranda, Capital Leon, Capital Estoque, Capital


    1/3 1/3 1/3
    ( 400,000.00) ( 600,000.00) ( 1,000,000.00)

    ( (150,000.00) ( (150,000.00) ( (150,000.00)


    ( 250,000.00) ( 450,000.00) ( 850,000.00)

    ( 250,000.00) ( 450,000.00) ( 850,000.00)


    ( (250,000.00) ( (450,000.00) ( (850,000.00)
    Problem 2
    Miranda, Leon and Estoque
    Statement of Liquidation
    March 31, 2019

    Cash NonCash Assets Liabilities


    P/L Ratio
    Balances before Liquidation ( 150,000.00) ( 2,600,000.00) ( 750,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization
    Balances
    Payment of Liabilities
    Balances
    Payment to Partners

    Cash
    Arenas, capital
    Dulay, capital
    Laurente, capital
    Noncash Assets ( -  )

    Liabilities
    Cash ( -  )

    Arenas, capital
    Dulay, capital
    Laurente, capital
    Cash ( -  )
    nd Estoque
    quidation
    2019

    Arenas, Capital Dulay, Capital Laurente, Capital


    1/3 1/3 1/3
    ( 400,000.00) ( 600,000.00) ( 1,000,000.00)
    Problem 3
    Gulane, Tormis and Sailadin
    Statement of Liquidation
    June 30, 2019

    Cash Mdse Inventory Other Assets


    P/L Ratio
    Balances before Liquidation ( 419,170.00) ( 612,300.00) ( 472,680.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 1,133,700.00) ( (612,300.00) ( (472,680.00)
    Balances ( 1,552,870.00) ( -  )
    Payment of Liabilities ( (131,350.00)
    Balances ( 1,421,520.00) ( -  )
    Payment to Partners ( (1,421,520.00)

    Cash ( 1,133,700.00)
    Mdse Inventory ( 612,300.00)
    Other Assets ( 472,680.00)
    Gulane, capital ( 19,488.00)
    Tormis, capital ( 19,488.00)
    Sailadin, capital ( 9,744.00)

    Liabilities ( 131,350.00)
    Cash ( 131,350.00)

    Arenas, capital ( 581,088.00)


    Dulay, capital ( 456,288.00)
    Laurente, capital ( 384,144.00)
    Cash ( 1,421,520.00)
    ne, Tormis and Sailadin
    ement of Liquidation
    June 30, 2019

    Accounts Payable Gulane, capital Tormis, capital Sailadin, capital


    2/5 2/5 1/5
    ( 131,350.00) ( 561,600.00) ( 436,800.00) ( 374,400.00)

    ( 19,488.00) ( 19,488.00) ( 9,744.00)


    ( 131,350.00) ( 581,088.00) ( 456,288.00) ( 384,144.00)
    ( (131,350.00)
    ( -  ) ( 581,088.00) ( 456,288.00) ( 384,144.00)
    ( (581,088.00) ( (456,288.00) ( (384,144.00)
    Problem 3
    Gulane, Tormis and Sailadin
    Statement of Liquidation
    June 30, 2019

    Cash Mdse Inventory Other Assets


    P/L Ratio
    Balances before Liquidation ( 419,170.00) ( 612,300.00) ( 472,680.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization
    Balances
    Payment of Liabilities
    Balances
    Payment to Partners

    Cash
    Mdse Inventory
    Other Assets
    Gulane, capital
    Tormis, capital
    Sailadin, capital

    Liabilities
    Cash

    Arenas, capital
    Dulay, capital
    Laurente, capital
    Cash
    ne, Tormis and Sailadin
    ement of Liquidation
    June 30, 2019

    Accounts Payable Gulane, capital Tormis, capital Sailadin, capital


    2/5 2/5 1/5
    ( 131,350.00) ( 561,600.00) ( 436,800.00) ( 374,400.00)
    Problem 4
    Villanueva and Resultay
    Statement of Liquidation

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 250,000.00) ( 450,000.00) ( 300,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 170,000.00) ( (450,000.00)
    Balances ( 420,000.00) ( -  ) ( 300,000.00)
    Payment of Liabilities ( (300,000.00) ( (300,000.00)
    Balances ( 120,000.00) ( -  ) ( -  )
    Additional investments ( 10,000.00)
    Balances ( 130,000.00) ( -  ) ( -  )
    Payment to Partners ( (130,000.00)

    Cash ( 170,000.00)
    Villanueva, capital ( 210,000.00)
    Resultay, capital ( 70,000.00)
    Noncash assets ( 450,000.00)

    Liabilities ( 300,000.00)
    Cash ( 300,000.00)

    Cash ( 10,000.00)
    Villanueva, capital

    Resultay, capital ( 130,000.00)


    Cash ( 130,000.00)
    Villanueva, capital Resultay, capital
    3/4 1/4
    ( 200,000.00) ( 200,000.00)

    ( (210,000.00) ( (70,000.00)
    ( (10,000.00) ( 130,000.00)

    ( (10,000.00) ( 130,000.00)
    ( 10,000.00)
    ( -  ) ( 130,000.00)
    ( (130,000.00)
    Problem 4
    Villanueva and Resultay
    Statement of Liquidation

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 250,000.00) ( 450,000.00) ( 300,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 170,000.00) ( (450,000.00)
    Balances ( 420,000.00) ( -  ) ( 300,000.00)
    Payment of Liabilities ( (300,000.00) ( (300,000.00)
    Balances ( 120,000.00) ( -  ) ( -  )
    Additional investments ( 10,000.00)
    Balances ( 130,000.00) ( -  ) ( -  )
    Payment to Partners ( (130,000.00)

    Cash ( 170,000.00)
    Villanueva, capital ( 210,000.00)
    Resultay, capital ( 70,000.00)
    Noncash assets ( 450,000.00)

    Liabilities ( 300,000.00)
    Cash ( 300,000.00)

    Cash ( 10,000.00)
    Villanueva, capital ( 10,000.00)

    Resultay, capital ( 130,000.00)


    Cash ( 130,000.00)
    Villanueva, capital Resultay, capital
    3/4 1/4
    ( 200,000.00) ( 200,000.00)

    ( (210,000.00) ( (70,000.00)
    ( (10,000.00) ( 130,000.00)

    ( (10,000.00) ( 130,000.00)
    ( 10,000.00)
    ( -  ) ( 130,000.00)
    ( (130,000.00)
    Problem 5
    Escareal, Acosta and Lopez
    Statement of Liquidation

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 150,000.00) ( 1,000,000.00) ( 250,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 460,000.00) ( (1,000,000.00)
    Balances ( 610,000.00) ( -  ) ( 250,000.00)
    Payment of Liabilities ( (250,000.00) ( (250,000.00)
    Balances ( 360,000.00) ( -  ) ( -  )
    Additional losses to
    Escareal & Lopez
    Balances ( 360,000.00) ( -  ) ( -  )
    Payment to Partners ( (360,000.00)

    Cash ( 460,000.00)
    Escareal, capital ( 180,000.00)
    Acosta, capital ( 270,000.00)
    Lopez, capital ( 90,000.00)
    Noncash assets ( 1,000,000.00)

    Liabilities ( 250,000.00)
    Cash ( 250,000.00)

    Escareal, capital ( 40,000.00)


    Lopez, capital ( 20,000.00)
    Acosta, capital ( 60,000.00)

    Escareal, capital ( 80,000.00)


    Lopez, capital ( 280,000.00)
    Cash ( 360,000.00)
    and Lopez
    quidation

    Escareal, capital Acosta, capital Lopez, capital


    2/6 3/6 1/6
    ( 300,000.00) ( 210,000.00) ( 390,000.00)

    ( (180,000.00) ( (270,000.00) ( (90,000.00)


    ( 120,000.00) ( (60,000.00) ( 300,000.00)

    ( 120,000.00) ( (60,000.00) ( 300,000.00)

    ( (40,000.00) ( 60,000.00) ( (20,000.00)


    ( 80,000.00) ( -  ) ( 280,000.00)
    ( (80,000.00) ( (280,000.00)
    Problem 5
    Escareal, Acosta and Lopez
    Statement of Liquidation

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 150,000.00) ( 1,000,000.00) ( 250,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 460,000.00) ( (1,000,000.00)
    Balances ( 610,000.00) ( -  ) ( 250,000.00)
    Payment of Liabilities ( (250,000.00) ( (250,000.00)
    Balances ( 360,000.00) ( -  ) ( -  )
    Additional losses to
    Escareal & Lopez
    Balances ( 360,000.00) ( -  ) ( -  )
    Payment to Partners ( (360,000.00)

    Cash ( 460,000.00)
    Escareal, capital ( 180,000.00)
    Acosta, capital ( 270,000.00)
    Lopez, capital ( 90,000.00)
    Noncash assets ( 1,000,000.00)

    Liabilities ( 250,000.00)
    Cash ( 250,000.00)

    Escareal, capital ( 40,000.00)


    Lopez, capital ( 20,000.00)
    Acosta, capital ( 60,000.00)

    Escareal, capital ( 80,000.00)


    Lopez, capital ( 280,000.00)
    Cash ( 360,000.00)
    and Lopez
    quidation

    Escareal, capital Acosta, capital Lopez, capital


    2/6 3/6 1/6
    ( 300,000.00) ( 210,000.00) ( 390,000.00)

    ( (180,000.00) ( (270,000.00) ( (90,000.00)


    ( 120,000.00) ( (60,000.00) ( 300,000.00)

    ( 120,000.00) ( (60,000.00) ( 300,000.00)

    ( (40,000.00) ( 60,000.00) ( (20,000.00)


    ( 80,000.00) ( -  ) ( 280,000.00)
    ( (80,000.00) ( (280,000.00)
    Problem 11
    ABL Partnership
    Statement of Liquidation
    Dec 1, 2019

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 25,000.00) ( 475,000.00) ( 240,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 260,000.00) ( (475,000.00)
    Balances ( 285,000.00) ( -  ) ( 240,000.00)
    Payment of Liabilities ( (240,000.00) ( (240,000.00)
    Balances ( 45,000.00) ( -  ) ( -  )
    Right to offset with loans
    Balances ( 45,000.00) ( -  ) ( -  )
    Additional Investments of
    solvent partners ( 31,000.00)
    Balances ( 76,000.00) ( -  ) ( -  )
    Additional Loss to solvent
    partners
    Balances ( 76,000.00) ( -  ) ( -  )
    Payment to Partners ( (76,000.00)

    Cash ( 260,000.00)
    Aparece, capital ( 43,000.00)
    Bantilles, capital ( 86,000.00)
    Lerin, capital ( 86,000.00)
    Noncash assets ( 475,000.00)

    Liabilities ( 240,000.00)
    Cash ( 240,000.00)

    Bantilles, loan ( 30,000.00)


    Bantilles, capital ( 30,000.00)

    Cash ( 31,000.00)
    Bantilles, capital ( 6,000.00)
    Aparece, capital ( 25,000.00)

    Aparece, capital ( 1,000.00)


    Lerin, capital ( 1,000.00)

    Aparece, capitol ( 76,000.00)


    Cash ( 76,000.00)
    ABL Partnership
    ement of Liquidation
    Dec 1, 2019

    Bantilles, Loan Aparece, capital Bantilles, capital Lerin, capital


    20% 40% 40%
    ( 30,000.00) ( 120,000.00) ( 50,000.00) ( 60,000.00)

    ( (43,000.00) ( (86,000.00) ( (86,000.00)


    ( 30,000.00) ( 77,000.00) ( (36,000.00) ( (26,000.00)

    ( 30,000.00) ( 77,000.00) ( (36,000.00) ( (26,000.00)


    ( (30,000.00) ( 30,000.00)
    ( 77,000.00) ( (6,000.00) ( (26,000.00)

    ( 6,000.00) ( 25,000.00)
    ( -  ) ( 77,000.00) ( -  ) ( (1,000.00)

    ( (1,000.00) ( 1,000.00)
    ( -  ) ( 76,000.00) ( -  ) ( -  )
    ( (76,000.00) ( -  )
    Problem 11
    ABL Partnership
    Statement of Liquidation
    Dec 1, 2019

    Cash Noncash assets Accounts Payable


    P/L Ratio
    Balances before Liquidation ( 25,000.00) ( 475,000.00) ( 240,000.00)
    Sale of Noncash Assets &
    Distribution of Gain on
    Realization ( 260,000.00) ( (475,000.00)
    Balances ( 285,000.00) ( -  ) ( 240,000.00)
    Payment of Liabilities ( (240,000.00) ( (240,000.00)
    Balances ( 45,000.00) ( -  ) ( -  )
    Right to offset with loans
    Balances ( 45,000.00) ( -  ) ( -  )
    Additional Investments of
    solvent partners ( 31,000.00)
    Balances ( 76,000.00) ( -  ) ( -  )
    Additional Loss to solvent
    partners
    Balances ( 76,000.00) ( -  ) ( -  )
    Payment to Partners ( (76,000.00)

    Cash ( 260,000.00)
    Aparece, capital ( 43,000.00)
    Bantilles, capital ( 86,000.00)
    Lerin, capital ( 86,000.00)
    Noncash assets ( 475,000.00)

    Liabilities ( 240,000.00)
    Cash ( 240,000.00)

    Bantilles, loan ( 30,000.00)


    Bantilles, capital ( 30,000.00)

    Cash ( 31,000.00)
    Bantilles, capital ( 6,000.00)
    Lerin, capital ( 25,000.00)

    Aparece, capital ( 1,000.00)


    Lerin, capital ( 10,000.00)

    Aparece, capital ( 76,000.00)


    Cash ( 76,000.00)
    ABL Partnership
    ement of Liquidation
    Dec 1, 2019

    Bantilles, Loan Aparece, capital Bantilles, capital Lerin, capital


    20% 40% 40%
    ( 30,000.00) ( 120,000.00) ( 50,000.00) ( 60,000.00)

    ( (43,000.00) ( (86,000.00) ( (86,000.00)


    ( 30,000.00) ( 77,000.00) ( (36,000.00) ( (26,000.00)

    ( 30,000.00) ( 77,000.00) ( (36,000.00) ( (26,000.00)


    ( (30,000.00) ( 30,000.00)
    ( -  ) ( 77,000.00) ( (6,000.00) ( (26,000.00)

    ( 6,000.00) ( 25,000.00)
    ( -  ) ( 77,000.00) ( -  ) ( (1,000.00)

    ( (1,000.00) ( 1,000.00)
    ( -  ) ( 76,000.00) ( -  ) ( -  )
    ( (76,000.00)

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