Title | Accounting for Partnership and Corporation SOLMAN (Baysa & Lupisan, 2014) Chapter 7 |
---|---|
Author | Thyone Savva |
Course | Bachelor of Science in Accountancy |
Institution | Polytechnic University of the Philippines |
Pages | 20 |
File Size | 328.6 KB |
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PC Chapter 7 page 1 CHAPTER 7 Installment Liquidation E Balances before liquidation Restricted interest possible loss of if nothing is realized on the remaining assets Balances Distribution of cash to partners Cash P Aguilar P Bernardo P P ( ( 50,400) P 29,600 ( 29,600) ( 33,600) P 10,400 ( 10,400) ...
PC – Chapter 7
page 1
CHAPTER 7 Installment Liquidation E 7-1 Balances before liquidation Restricted interest – possible loss of P84,000 if nothing is realized on the remaining non-cash assets Balances Distribution of cash to partners
Cash 40,000
Aguilar P 80,000
Bernardo P 44,000
P 40,000 ( 40,000)
( 50,400) P 29,600 ( 29,600)
( 33,600) P 10,400 ( 10,400)
Conde P142,000 ( 10,000)
Dalmacio P 108,000 ( 10,000)
(110,000) P22,000
(110,000) (P12,000)
( 12,000) P 10,000 ( 10,000)
12,000 -
P
E. 7-2 Balances before liquidation Estimated liquidating expenses Possible loss of P220,000 if nothing is realized on non-cash assets Balances Additional possible loss to Conde for the deficiency of Dalmacio Balances Payment to Conde E 7-3 Estela, Fajardo and Gomez Cash Priority Program
Capital balances Add Loan balances Total partners’ interest Profit and loss ratio Loss absorption balance Allocation 1 – Cash to Gomez reducing LAB to an amount reported for Fajardo (P125,000 x 20%) Balances Allocation II – Cash to Fajardo & Gomez reducing LAB to an amount reported for Estela P100,000 x 40% P100,000 x 20% Balances Allocation III – further cash distribution may be made in the P & L ratio E 7-4
Estela P 30,000 20,000 P 50,000 40% P125,000
Fajardo P 70,000 20,000 P 90,000 40% P225,000
Gomez P40,000 30,000 P 70,000 20% P350,000
P125,000
P225,000
(125,000) P225,000
Estela
P25,000
(100,000) P125,000
(100,000) P125,000 P125,000
PAYMENTS Fajardo Gomez
P40,000 -
P40,000
20,000 P45,000
PC – Chapter 7
page 2
Halili, Ibanez and Jacinto Cash Priority Program
Capital balances Profit and loss ratio Loss absorption balance Allocation I – Cash to Ibanez reducing LAB to an amount reported for Jacinto (P4,900 x 2/7) Balances Allocation II – Cash to Ibanez & Jacinto reducing LAB to an amount reported for Halili P21,000 x 2/7 P21,000 x 1/7 Balances Allocation III – Further cash distributions may be made in the P & L ratio
2.
Halili P11,200 4/7 P19,600
Ibanez P13,000 2/7 P45,500
Jacinto P5,800 1/7 P40,600
P19,600
( 4,900) P40,600
P40,600
Halili
PAYMENTS Ibanez Jacinto
P 1,400
(21,000) P19,600
P19,600
Book value of assets Loss on realization Capital balance of Halili prior to realization Cash to be received by Halili Share of Halili in the loss on realization Fractional share of Halili Cash to be realized of the sale of assets
6,000 (21,000) P19,600
-
P 7,400
P 3,000 P 3,000
P30,000 P 11,200 10,000 P 1,200 4/7
2,100 P27,900
3.
Allocation III – P3,200 4/7 = P5,600 x 1/7 Allocation II Total cash received by Jacinto
P
4.
Book value of assets Total cash available Allocation I Allocation II – P1,800 – P1,400 2/3 Loss on liquidation
P 30,000
E 7-5
800 3,000 P 3,800
P 1,400 600
2,000 P 28,000
PC – Chapter 7
page 3
1.
Kho, Lagman and Magno Cash Priority Program January 1, 2009
Capital balances before liquidation Add Note payable to Magno Total partners’ interest Profit and loss ratio Loss absorption balances Allocation I – Cash to Lagman reducing LAB to an amount reported for Kho (P60,000 x 3/10) Balances Allocation II – Cash to Kho & Lagman reducing LAB to an amount reported for Magno (P40,000 x 3/10) Balances Allocation III – Further cash distributions may be made in the P & L ratio
2.
Balances before liquidation January: Sale of assets and dist. of loss Payment of liquidation expenses Payment of liabilities Distribution of cash to partners (sch. 1) Balances February: Sale of assets and distribution of gain Payment of liquidation expenses Distribution of cash to partners (sch. 2) Balances March: Sale of assets and distribution of loss Balances Offset of loan against deficiency Final payment to partners
Kho P 36,000
Lagman P 54,000
P 36,000 3/10 P120,000
P 54,000 3/10 P180,000
Magno P18,000 14,000 P 32,000 4/10 P80,000
Kho
P120,000
(60,000) P120,000
P80,000
( 40,000) P80,000
(40,000) P80,000
P80,000
P12,000 P12,000
NP to Magno P14,000
Kho P36,000
PAYMENTS Lagman Magno
P18,000
12,000 P20,000
-
Kho, Lagman and Magno Statement of Liquidation January to March, 2009 Cash P12,000
Other Assets P146,000
30,000
( 38,000)
( 3,600) ( 36,000)
Liabilities P36,000
( 2,400)
( 2,400)
( 3,200)
( 1,080)
(1,080
(1,440)
P32,520
(2,400) P48,120
P13,360
2,700
2,700
3,600
(2,520)
(2,520)
(3,360)
P14,000
(10,000) P22,700
(25,600) P22,700
P13,600
P14,000
(11,100) P11,600
(11,100) P11,600
(14,800) P(1,200)
( 1,200) (P12,800)
(P11,600)
(P11,600)
(36,000)
( 2,400) P108,000
44,000
P14,000
(35,000)
(8,400) (35,600) P73,000
36,000 P36,000
PAYMENTS Lagman Magno P54,000 P18,000
(73,000)
(P36,000)
Schedule 1 Installment Liquidation January 31, 2009
1,200
PC – Chapter 7
page 4
Cash available Allocation I – Payable to Lagman
Amount P2,400 P2,400
Kho
Lagman
Mango
P2,400
Schedule 2 Installment Liquidation February 28, 2009
Cash available Allocation I – Balance Payable to Lagman Allocation II – Payable to Kho and Lagman
3. Journal entries January Cash Kho, Capital Lagman, Capital Magno, Capital
Amount P2,400
Kho
P2,400 P20,000
Lagman
Mango
P2,400 P10,000 P10,000
10,000 P25,600
30,000 2,400 2,400 3,200
Other assest Kho, Capital Lagman, Capital Magno, Capital
38,000 1,080 1,080 1,440
Cash Liabilities Cash Lagman, Capital
3,600 36,000 36,000 2,400
Cash February
Cash Other assets
2,400 44,000 35,000 2,700 2,700 3,600
Kho, Capital Lagman, Capital Magno, Capital Kho, Capital Lagman, Capital Magno, Capital
2,520 2,520 3,360
Cash Kho. Capital Lagman, Capital
Cash
-
8,400 10,000 25,600 35,600
PC – Chapter 7
March
page 5
Cash Kho, Capital Lagman, Capital Magno, Capital
36,000 11,100 11,100 14,800
Other assets Note Payable to Magno
73,000 1,200
Magno, Capital
Note Payable to Magno Kho, Capital Lagman, Capital Cash
1,200 12,800 11,600 11,600 36,000
PC – Chapter 7
page 6
P 7-1 NOPQ Trading Statement of Liquidation February 1 – March 31, 2009
Balances before liquidation February: Sale of assets & distribution of loss Payment of liabilities Payment of liquidation expenses Balances Payment to partners (sch. 1) Balances March: Sale of assets & distribution of gain Payment of liabilities Payment of liquidation expenses Balances Payment to partners (sch. 2) Balances, March 31
Other Cash Assets Liabilities P100,320 P193,530 P21,360 49,320 (66,060) ( 17,750) ( 8,220) P123,670 P127,470 (120,060) P 3,610 P127,470 48,330 ( 3,610) ( 7,380) P 40,950 ( 40,950)
Noble Loan P15,000
CAPITAL Noble Orbos Pimentel (20%) (30%) (30%) P24,120 P96,480 P109,020
Quezon (20%) P27,870
( 3,348)
( 5,022)
( 5,022)
( 3,348)
( 1,644) P19,128
( 2,466) ( 2,466) P88,992 P101,532 (49,770) (62,310) P39,222 P39,222
( 1,644) P22,878
( 17,750) P 3,610 P 3,610
P15,000 ( 7,980) P 7,020
(44,850)
P19,128
P22,878
696
1,044
1,044
696
( 1,476) P18,348 ( 1,824) P16,524
( 2,214) P38,052 (13,266) P24,786
( 2,214) P38,052 (13,266) P24,786
( 1,476) P22,098 ( 5,574) P16,524
( 3,610) P 82,620 P 82,620
P 7,020 ( 7,020)
PC – Chapter 7
page 7
NOPQ Trading Co. Schedule To Accompany Statement of Liquidation Amounts to be Paid to Partners Februart 28, 2009
Capital balances before cash distribution Add Loan balances Total partners’ interest Restricted interest – possible loss if nothing is realized on remaining assets Balances Restricted interest – additional possible loss if Quezon is unable to pay his deficiency (20:30:30) Free interest – payments to partners Payment to apply on Loan Capital Total cash distribution
Noble P19,128 15,000 P34,128
Orbos P88,992
Pimentel P101,532
Quezon P22,878
P88,992
P101,532
P22,878
(25,494) P 8,634
(38,241) P50,751
(38,241) P 63,291
(25,494) (P2,616)
( 654) P 7,980
( 981) P49,770
( 981) P62,310
(2,616)
P49,770 P49,770
P62,310 P62,310
P 7,980 P 7,980
P P
---------
NOPQ Trading Co. Schedule To Accompany Statement of Liquidation Amounts to be Paid to Partners March 31, 2009
Capital balances before cash distribution Add Loan balance Total partners’ interest Restricted interest – possible loss if nothing is realized on remaining assets Free interest – payments to partners
Noble P18,348 7,020 P25,368
Orbos P38,052
Pimentel P38,052
Quezon P22,098
P38,052
P38,052
P22,098
(16,524) P8,844
(24,786) P13,266
(24,786) P13,266
(16,524) P 5,574
Payment to apply on: Loan Capital Total cash distribution
P 7,020 1,824 P 8,844
P13,266 P13,266
P13,266 P13,266
P 5,574 P 5,574
PC – Chapter 7
P 7-2 1. January :
page 8
a.
Cash
112,000 Accounts Receivable
b.
c. d.
February:
a.
112,000
Reyes, Capital Samson, Capital Toledo, Capital Cash
2,200 1,100 1,100
Accounts Payable Cash
38,000
Toledo, Capital Toledo, Capital Cash Cash
4,400
38,000 9,000 7,000 16,000 36,000
Accounts Receivable b.
Reyes, Capital Samson, Capital Toledo, Capital
c.
Accounts Payable Cash Reyes, Capital Samson, Capital Toledo, Capital
36,000 1,400 700 700 2,800
d.
March:
a.
b.
c.
Salary Payable to Reynes Reyes, Capital Samson, Capital Toledo, Capital Cash Cash Reyes, Capital Samson, Capital Toledo, Capital Accounts Receivable
39,000 38,000 500 250 250 6,000 1,400 3,700 8,700 19,800 35,000 4,000 2,000 2,000 43,000
Reyes, Capital Samson, Capital Toledo, Capital Cash
2,000 1,000 1,000
Reyes, Capital Samson, Capital Toledo, Capital Cash
39,500 19,750 19,750
4,000
79,000
PC – Chapter 7
page 9
P 7-2 Reyes, Samson and Toledo Partnership Statement of Liquidation February 1 – March 31, 2009
Balances before liquidation January: Collections from customers Payment of liquidation expenses Payment of liabilities Balances Payment to partners (see schedule) Balances February: Collections from customers Payment of liquidation expenses Payment of liabilities & dist. of gain Balances Payment to partners (see schedule) Balances March: Collections from cust. & dist. of loss Payment of liquidation expenses Balances Payment to partners
Cash P19,000
Other Assets Liabilities P191,000 P77,000
112,000 (112,000) ( 4,400) (38,000) P88,600 P79,000 ( 16,000) P72,600 P79,000 36,000 ( 2,800) (38,000) P67,800 (19,800) P48,000
(36,000)
35,000 ( 4,000) P79,000 ( 79,000)
(43,000)
(38,000) P39,000 P39,000
Toledo Loan P 9,000
P 9,000 ( 9,000)
CAPITAL Sal. Pay Reyes Samson to Reyes P 6,000 P50,000 P28,000
P40,000
( 2,200)
( 1,100)
( 1,100)
P 6,000
P47,800
P26,900
P 6,000
P47,800
P26,900
P38,900 ( 7,000) P31,900
( 1,400) 500 P46,900 ( 1,400) P45,500
( 700) 250 P26,450 ( 3,700) P22,750
( 700) 250 P31,450 ( 8,700) P22,750
( 4,000) ( 2,000) P39,500 (39,500)
( 2,000) ( 1,000) P19,750 (19,750)
( 2,000) ( 1,000) P19,750 (19,750)
(39,000) P43,000 P43,000
P6,000 (6,000)
Toledo
PC – Chapter 7
page 10
Reyes, Samson and Toledo Partnership Cash Priority Program January 1, 2009
Reyes Samson P 50,000 P28,000 6,000 P 56,000 P28,000 50% 25% P112,000 P112,000
Capital balances before liquidation Add Loan balances Total partners’ interest Profit and loss ratio Loss absorption balance Allocation I – Cash to Toledo reducing LAB to an amount reported for Reyes and Samson, reduction of P84,000 requires payment (25% x P84,000) Balances P112,000 P112,000 Allocation II – Further cash distributions may be made in the profit and loss ratio
Toledo P40,000 9,000 P49,000 25% P196,000
(84,000) P112,000
SCHEDULE OF CASH DISTRIBUTION: January:
February:
Cash available Allocation I: Payable to Toledo Cash available Allocation I – Balance Payable to Toledo Allocation II Payable according to P & L ratio
Amount P16,000
Reyes
Samson
16,000
Toledo
P16,000
P19,800 5,000
P14,800
5,000
P7,400 P7,400
P3,700 P3,700
P3,700 P8,700
PAYMENTS Reyes Samson Toledo
-
-
P21,000 P21,000
PC – Chapter 7 11
page
P 7-3 Urbe, Verde and Waje Cash Priority Program January 1, 2009 PAYMENTS Capital balances before liquidation Loan balances Total partners’ interest Profit and loss ratio Loss absorption balances Allocation I – Cash to Verde reducing LAB to an amount reported for
Urbe
Verde
Waje
P120,000 45,000 P165,000 50% P330,000
P90,000 30,000 P120,000 30% P400,000
P40,000 P13,000 P43,000 20% P265,000
P330,000
(70,000) P330,000
P265,000
(65,000) P265,000
(65,000) P265,000
P265,000
Urbe (P70,000 x 30%) Balances Allocation II – Cash to Urbe & Verde to reduce LAB to an amount reported for Waje (P65,000 x 30%) (P65,000 x 20%) Balances Allocation III – Further cash distributions may be made in the P & L ratio
Urbe
Verde
Waje
P21,000
P32,500 P32,500
19,500 P40,500
-
2. Amount
Urbe
Verde
Waje
January: Cash available Allocation I – payable to Verde February: Cash available Allocation I – Bal. payable to Verde Allocation II – Payable to Urbe and Verde in the
ratio of 50:30
P15,000 15,000
P15,000
P40,000 6,000
P6,000
P34,000
P21,250
P12,750
P21,250
P18,750
P11,250 360,00 P47,250
P 6,750 21,600 P28,350
P14,400 P14,400
P15,000
P9,000
P6,000
March: Cash available Allocation II – Balance Allocation III – Based on P & L ratio
P90,000 18,000 P72,000
Cash available Allocation III – Based on P & L ratio
P30,000 30,000
April:
PC – Chapter 7
page 12
P 7-3 Urbe, Verde and Waje Statement of Liquidation January 1 to April 30, 2009
Cash Balances before liquidation January: Sale of assets Payment of partners Balances February: Sale of assets Payment to partners Balances March: Sale of assets Payment to partners Balances April: Sale of assets & distribution of loss Balances Payment to partners
P15,000 (15,000)
Other Assets P338,000
90,000 (90,000)
Waje P13,000
Urbe P120,000
CAPITAL Verde Waje P90,000 P40,000
P45,000
(15,000) P15,000
P13,000
P120,000
P90,000 P40,000
P13,000
P120,000
(3,750)) P86,250
P40,000
(13,000)
(23,500) P96,500
(28,350) P57,900
(1,400) P38,600
(81,500) P15,000 (15,000)
(48,900) P9,000 (9,000)
(32,600) P 6,000 (6,000)
(40,000) (21,250) P283,000 P23,750
(15,000)
(90,000) (23,750) P193,000
30,000 P30,000 (30,000)
LOAN Verde P30,000
(15,000) P323,000
40,000 (40,000)
Urbe P45,000
(193,000)
PC – Chapter 7 13
page
P 7-4 Xavier, Yambot and Zapanta Cash Distribution Schedule June 30, 2009
Capital balances before liquidation Receivable from partners Total partners’ interest Profit and loss ratio Loss absorption balance Allocation I – Cash to Yambot to reduce LAB to amount reported for Zapanta (P30,000 x 30%) Balances Allocation II – Cash to Zapanta & Yambot to reduce LAB to an amount reported for Xavier Balances Allocation III – Based on P & L ratio (P6,000 + P100,000 – P17,000 = P89,000 – P14,000)
Xavier P 67,000 (12,000) P 55,000 50% P110,000
Yambot P 45,000 P 45,000 30% P150,000
Zapanta P 31,500 (7,500) P 24,000 20% P120,000
P110,000
30,000 P120,000
P120,000
P110,000
10,000 P110,000
10,000 P110,000
PAYMENTS Xavier Yambot Zapanta
P9,000
P37,500 P37,500
TOTALS
3,000
2,000
22,500 P34,500
15,000 P17,000
P 7-5 Fernan, Luisa and Susan Statement of Changes in Partners’ Equity For the Period of January 1, 2007 to May 31, 2009 2007 Original investment Distribution of net income (sch.1) Total Drawings Balances, December 31 2008 Investmen...