Alexis, Bang, Cang - Acct 201 Practice Problem - Cash Priority Program PDF

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Summary

Capital and loan balances for partners Rosie, Ronie, Roxie wrespectively, are as follows just before liquidation: ho share profits 40%, 40%, and 20% Rosie, Loan 20,000 Ronie Capital 70, Rosie, Capital 30,000 Roxie, Loan 30, Ronie, loan 20,000 Roxie Capital 40, Instructions:Prepare a statement/progra...

Description

Capital and loan balances for partners Rosie, Ronie, Roxie who share profits 40%, 40%, and 20% respectively, are as follows just before liquidation: Rosie, Loan

20,000 Ronie Capital

70,000

Rosie, Capital

30,000 Roxie, Loan

30,000

Ronie, loan

20,000 Roxie Capital

40,000

Instructions: Prepare a statement/program to show how available cash would be distributed to the partners during the course of liquidation after creditors are paid in full. State which partner would receive the first cash available and at what point and to what degree each of the remaining partners would participate in cash distributions.

Cash Priority Program PAYMENTS Estela Fajardo Gomez Estela Fajardo Gomez Capital balances

P 30,000 P 70,000 P40,000 Add Loan balances 20,000 20,000 30,000 Total partners’ interest P 50,000 P 90,000 P 70,000 Profit and loss ratio 40%

40% 20% Loss absorption balance P125,000 P225,000 P350,000 Allocation 1 – Cash to Gomez reducing LAB to an amount reported for Fajardo (P125,000 x 20%) (125,000)

P25,000 Balances P125,000 P225,000 P225,000 Allocation II – Cash to Fajardo & Gomez reducing LAB to an amount reported for Estela P100,000 x 40% P100,000 x 20% (100,000)

(100,000)

P40,000 20,000 Balances P125,000 P125,000 P125,000 P40,000 P45,000 Allocation III – further cash distribution may be made in the

P & L ratio Partners Alexis, Bang, and Cang have capital balances of P11,200; P 13,000; and P5,800, respectively and share profits in the ratio of 4:2:1. Instructions: a. Prepare a schedule showing how available cash will be distributed to partners as it becomes available. b. How much must the partnership realize on the sale of its assets if Alexis is to receive P 10,000 as final settlement? c. If Alexis receives a total of P3,200 in cash, how much will Cang have received at this point? d. If Alexis is personally insolvent and Bang receives a total of P 1,800 in final liquidation of the firm, what was the partnership loss on liquidation?...