Silfavan Part. Liq. Problems-Practice 2 answer PDF

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Problem # Lump-Sum LiquidationGulane, Tormis, and Sailadin decided to liquidate their partnership on June 30, 2020. The partners shared profits and losses in the ratio of 2:2:1, respectively. The firm’s post-closing trial balance follows:Gulane, Tormis and Sailadin Post-CLosing Trial Balance June 30...

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Problem #1 Lump-Sum Liquidation Gulane, Tormis, and Sailadin decided to liquidate their partnership on June 30, 2020. The partners shared profits and losses in the ratio of 2:2:1, respectively. The firm’s post-closing trial balance follows: Gulane, Tormis and Sailadin Post-CLosing Trial Balance June 30, 2020

Account Name Cash Merchandise Inventory Other Assets Accounts Payable Gulane, Capital Tormis, Capital Sailadin, Capital

Debit P 419,170 612,300 472,680

P1,504,150

Credit

P 131,350 561,600 436,800 374,400 P 1,504,1 50

The merchandise inventory and the other assets were sold for P582,800 and P550,900, respectively. Required: Prepare the liquidation journal entries. Gulane, Tormis and Sailadin Statement of Liquidation June 30, 2019

Cash

Merchandise Inventory

Other Assets

Accounts Payable

Profit and Loss Ratio Percentages Balances before Liquidation

P 419,170

P 612,300

Merchandise Inventory

582,800

(612,300)

Other Assets

550,900

P 472,680

P 131,350

Gulane, Capital

Tormis, Capital

Sailadin, Capital

2/5

2/5

1/5

P 561,600

P 436,800

P 374,400

(11,800)

(11,800)

(5,900)

31,288

31,288

15, 644

P 581,088

P 456,288

P 384,144

Sale of Non-Cash Assets

Balances Payment of Liabilities to Outsiders

(472,680)

P1,552,870

P 131,350

131,350

(131,350)

Balances

P1,421,520

P 581,088

P 456,288

P 384,144

Payments to Partners

(1,421,520)

(581,088)

(456,288)

(384,144)

Journal Entry June 30

Cash 582,800 Loss on Realization 29,500 Merchandise Inventory To record sales of merchandise inventory with loss on realization

612,300

Computation: Loss on Realization: 582,800 – 612,300 = (29,500)

Gulane, Capital 11,800 Tormis, Capital 11,800 Sailadin, Capital 5,900 Loss on Realization To record loss distribution of loss Computation: Gulane: 29,500 x 1/4 = Tormi: 29,500 x 1/4 = Sailadin: 29,500 x 1/4 =

29,500

11,800 11,800 5,900

Cash 550,900 Other Assets Gain on Realization To record sales of other assets with gains on realization

472,680

78,220

Computation: Gain on Realization: 550,900 – 472,680 = 78,220

Gain on Realization 78,220 Gulane, Capital ` 31,288 Tormis, Capital 31,288 Sailadin, Capital 15, 644 To record loss distribution of gain on realization Computation: Gulane: 78,220 x 1/4 = 31,288 Tormis:78,220 x 1/4 = 31,288 Sailadin: 78,220 x 1/4 = 15, 644

Accounts Payable 131,350 Cash 131,350 To record the payments in accounts payable

Gulane, Capital Tormis, Capital Sailadin, Capital

581,088 456,288 384,144

Cash

To record distribution of cash to the partners

1,421,520

Problem #2 Lump-Sum Liquidation On Dec. 31, 2020, the Hungria and Blanche Partnership had the following assets, liabilities, and partners’ equity: Assets Liabilities Hungria, Capital Blanche, Capital P1,000,111= P250,000+ P400,000+ P350,000 When the partners agreed to liquidate the business, the assets were sold for P800,000 and the liabilities were paid. Hungria and Blanche share profits and losses in a ratio of 3:1, respectively. What is the final cash distribution to each partner after liquidation? Hungria and Blanche Partnership Statement of Liquidation June 30, 2019

Profit and Loss Ratio Percentages Balances before Liquidation Sale of Assets Balances Payment of Liabilities Balances Payments to Partners

Hungria, Capital 3/4

Blanche, Capital 1/4

P 250,000

P 400,000

P 350,000

P 250,000

(150,000) P 250,000

(50,000) P 300,000

P 550,000

P 250,000

P 300,000

(550,000)

(250,000)

(300,000)

P 800,000 P 800,000

Assets

Liabilities

P1,000,000 (1,000,000)

(250,000)

Computation: Loss on Realization:

800,000 – 1,000,000 = 200,000

Distribution of loss Hungaria: 200,000 x 3/4 = P150,000 Blanche:

200,000 x 1/4 = P 50,000

Answer: Cash Distribution to each partners: Hungaria: Blanche:

400,000 – 150,000 = P250,000 350,000 – 50,000 = P300,000

(250,000)...