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Quiz, Partnership Liquidation (Installment)

The document presents a series of partnership liquidation problems involving the distribution of cash and assets among partners after settling liabilities. It includes calculations for various scenarios regarding cash distributions and the impact of insolvency on partners' capital accounts. The problems require understanding of partnership accounting principles and the liquidation process.

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estrellaoconnor560
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56 views2 pages

Quiz, Partnership Liquidation (Installment)

The document presents a series of partnership liquidation problems involving the distribution of cash and assets among partners after settling liabilities. It includes calculations for various scenarios regarding cash distributions and the impact of insolvency on partners' capital accounts. The problems require understanding of partnership accounting principles and the liquidation process.

Uploaded by

estrellaoconnor560
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SEATWORK #3

PARTNERSHIP LIQUIDATION (INSTALLMENT)

NAME: ___________________________________________ SECTION:__________________

1._____________________ 6.____________________
2._____________________ 7.____________________
3._____________________ 8.____________________
4._____________________ 9.____________________
5._____________________ 10.___________________

PROBLEM 1
The partnership of Jinora, Ikki, and Meelo at the end of its 12-month year on October 31, 20x5 shows
account balances:

Cash P78,750 Liabilities P262,500


Noncash 682,500 Loan from Meelo 52,500
Loan to Ikki 26,250 Jinora, Capital (31%) 236,250
Ikki, Capital (51%) 157,500
Meelo, Capital (18%) 78,750

1. If P90,000 is available for distribution to partners after all non-partner liabilities are paid, how much should
Jinora receive?
2. If in the first distribution, Ikki received P6,250, how much should Meelo have received at this point?
3. If in the first distribution, Jinora received P172,500, how much should Ikki have received?
4. If in the first distribution, Meelo received P37,500, how much is the total cash distributed?
5. If Ikki received a total of P15,000 as a result of the liquidation, what was the total amount realized from the
sale of the non-cash assets?

PROBLEM 2
In a tragic accident in the sea, partners Desna and Eska were left incapacitated. A liquidator was assigned
to close their business, and their accounts showed cash, P35,000; other assets, P110,000; Liabilities,
P20,000; Desna, capital, P71,000; and Eska, capital, P54,000. Given the unique nature of the non-cash
assets, the liquidator anticipated it would take a substantial amount of time to sell them. The estimated
costs for winding down the business, including advertising, rent, and travel, amount to P10,000.
6. How much cash can be distributed safely to each partner at this point?

PROBLEM 3
The balance sheet for the partnership of JJ, CC and TT, whose shares of profits and losses are 40, 50 and
10 percent, is as follows:

Cash 50,000
Inventory 360,000
Accounts Payable 150,000
JJ, Capital 160,000
CC, Capital 45,000
TT, Capital 55,000

The partnership will be liquidated in installments. As cash becomes available, it will be distributed to the
partners. If the inventory costing P200,000 is sold for P140,000.
7. How much cash should be distributed to partner TT?
8. How much cash should be distributed to partner CC?
PROBLEM 4
A, B, C, and D are partners, sharing earnings in the ratio of 3/21, 4/21, 6/21 and 8/21, respectively. The
balances of their capital accounts on December 31, 20x1 are as follows:
A……………………………………………. ₱1,000
B………………………………………….. 25,000
C……………………………………………. 25,000
D…………………………………………… 9,000
₱ 60,000

The partners decide to liquidate, and they accordingly convert the non-cash assets into ₱23,200 of cash.
After paying the liabilities amounting to ₱3,000, they have ₱22,000 to divide. Assume that a debit balance
of any partner’s capital is uncollectible.
9. The share of C in the cash distribution to the partners was:

PROBLEM 5
ABC Co. decided to liquidate. The capital balances before the start of the liquidation process were as
follows:
A, Capital (30%) ₱350,000
B, Capital (20%) ₱250,000
C, Capital (50%) ₱350,000

In the first month of the liquidation process, all the partnership assets were sold and used to pay the
liabilities, except one for ₱50,000 which remains outstanding. A and B are solvent, but C is insolvent.
10. On the remaining claim against the partnership, A is to absorb?

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