Advanced accounting by baysa lupisan chapter 03a

AA1 -Chapter 3 (2008 edition))s

page 1

Exercise 3 – 7

Balances before liquidation
Sale of other assets & distribution of loss
Balances
Payment of liabilities
Balances
Offset of loan
Additional investment by Velasco
Balances
Asset distributed to Viola
Balances
July sale of assets and distribution of loss
Balances
Payment of liabilities
Balances
Possible loss on remaining other assets
Cash distribution to partners

Cash
P 80,000
200,000
P280,000
( 280,000)
--90,000
P 90,000
P 90,000

540,000
P630,000
(350,000)
P280,000
P280,000

Other
Assets
P960,000
( 300,000)
P660,000
P660,000
P660,000
( 200,000)
P460,000
( 400,000)
P 60,000
P 60,000
( 60,000)
-----

Liabilities
P630,000

Velasco
Loan
P 50,000

P630,000
( 280,000)

P350,000

P 50,000

P350,000

----

P350,000

-----

P350,000
( 350,000)
------

-----

-----

----

P 50,000
( 50,000)

----

Viola
P470,000
( 60,000)

P410,000
P410,000

CAPITAL
Velasco
(P140,000)
( 20,000)
(P160,000)

Vicente
P30,000
( 20,000)
P10,000
P10,000

P410,000
( 212,000)
P198,000
84,000
P282,000

(P160,000)
50,000
90,000
(P 20,000)
6,000
(P 14,000)
28,000
P 14,000

P282,000
( 36,000)
P246,000

P 14,000
( 12,000)
P 2,000

P44,000
( 12,000)
P32,000

P10,000
6,000
P16,000
28,000
P44,000


Chapter 3 – Partnership Liquidation
Suggested Answers

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PROBLEMS
Problem 3-1
1.

Profit and loss ratio
Balances before liquidation

Sale of non-cash assets and distribution of loss
Payment of liquidation expenses
Balances
Payment of liabilities
Balances
Additional investment of Elma
Balances
Payment to partners

Elma, Erica and Edna
Statement of Liquidation
January 1 – 31, 2008
Non-cash
Cash
Assets
Liabilities
P 80,000
634,000
( 24,000)
P690,000
(270,000)
P420,000
15,000
P435,000
( 435,000)

P810,000
(810,000)

P270,000

P270,000
(270,000)

Elma
3/8
P60,000
(66,000)
( 9,000)
(P15,000)
(P15,000)
15,000

C A P I T A L
Erica
Edna
3/8
2/8
P290,000
P270,000
( 66,000) ( 44,000)
( 9,000) ( 6,000)
P215,000
P220,000
P215,000

P220,000

P215,000
( 215,000)

P220,000
( 220,000)


Chapter 3 – Partnership Liquidation
Suggested Answers

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2.

Cash
Profit and loss ratio
Balances before liquidation
Sale of non-cash assets and distribution of loss
Payment of liquidation expenses
Balances
Payment of liabilities
Balances
Offset of loan against debit balance in the
capital balance of Elma
Balances
Payment to partners
3.

P 80,000
634,000
(24,000)
P690,000
(200,000)

P490,000

P490,000
(490,000)

Cash
Profit and loss ratio
Balances before liquidation

Sale of non-cash assets and distribution of
loss
Payment of liquidation expenses
Balances
Payment of liabilities
Balances
Offset of receivable against credit balance in
the capital of Erica
Balances
Payment to partners

P 80,000
634,000
(24,000)
P690,000
(200,000)
P490,000

Elma , Erica and Edna
Statement of Liquidation
January 1 – 31, 2008

Non-cash Note Payable
Assets
to Elma
P810,000
(810,000)

C A P I T A L
Liabilities

P70,000

P200,000

P70,000

P200,000
(200,000)

P70,000
( 15,000)
P55,000
( 55,000)
Elma , Erica and Edna
Statement of Liquidation
January 1 – 31, 2008
NR from
Non-cash
Assets
Erica

Elma

Erica

Edna

3/8
P60,000
(66,000)
( 9,000)
(P15,000)

3/8
P290,000
( 66,000)
( 9,000)
P215,000

2/8
P270,000
( 44,000)
( 6,000)
P220,000

(P15,000)

P215,000

P220,000

P215,000
( 215,000)

P220,000
( 220,000)

15,000

NP
to Elma

Liabilities

Elma

Erica

Edna

P70,000

P200,000

3/8
P60,000
(24,750)

3/8
P290,000
( 24,750)

2/8
P270,000
( 16,500)

P110,000

P70,000

P200,000
(200,000)

( 9,000)
P26,250

( 9,000)
P256,250

( 6,000)
P247,500

P110,000

P70,000

P26,250

P256,250

P247,500

P26,250
( 26,250)

( 110,000)
P146,250
( 146,250)

P247,500
( 247,500)

P110,000

P700,000
(700,000)

C A P I T A L

(110,000)
P490,000
(490,000)

P70,000
( 70,000)


Chapter 3 – Partnership Liquidation
Suggested Answers

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Problem 3 – 2 (Case 1)
Calma, Daza and Esteban
Statement of Liquidation
January, 2009
Other
Cash
Assets
Liabilities
Balances before liquidation
Sale of assets & distribution of loss
Balances
Payment of liabilities
Payment of to partners

P 20,000
250,000
P 270,000
( 112,000)
P 158,000

P 340,000
(340,000)
-

L O A N
Daza
Esteban

P 112,000

P 5,000

P 8,000

P 112,000
(112,000)
-

P 5,000

P 8,000

C A P I
T
Calma
Daza
(2/5)
(2/5)
P 95,000
P 60,000
(36,000)
(36,000)
P 59,000
P 24,000

P 5,000

P 8,000

P 59,000

P 24,000

A L
Esteban
(1/5)
P 80,000
(18,000)
P 62,000
P 62,000

Problem 3 – 2 (Case 2)
Calma, Daza and Esteban
Statement of Liquidation
January, 2009
Other
Cash
Assets
Liabilities
Balances before liquidation
Sale of assets & distribution of loss
Balances
Payment of liabilities
Balances
Offset of loan against debit balance in the
capital account
Payment to partners

P 20,000

185,000
P 205,000
( 112,000)
P 93,000
P 93,000

P 340,000
(340,000)
-

P 112,000

P 5,000

P 8,000

P 112,000
(112,000)
-

P 5,000

P 8,000

C A P I
T A L
Calma
Daza
Esteban
(2/5)

(2/5)
(1/5)
P 95,000
P 60,000
P 80,000
(62,000)
(62,000)
(31,000)
P 33,000
P( 2,000) P 49,000

P 5,000

P 8,000

P 33,000

P( 2,000)

P 49,000

P 33,000

2,000
-

P 49,000

-

L O A N
Daza
Esteban

(2,000)
P 3,000

P 8,000


Chapter 3 – Partnership Liquidation
Suggested Answers

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Problem 3 – 2 (Case 3)

Cash
Balances before liquidation
Sale of assets & distribution of loss
Balances
Payment of liabilities
Balances
Offset of loan against debit balance in the
capital account
Balances
Payment to partners
Balances
Additional investment by Daza
Payment to partners

Calma, Daza and Esteban
Statement of Liquidation
January, 2009
Other
Assets
Liabilities

P 20,000
170,000
P 190,000
( 112,000)
P 78,000
P 78,000
( 78,000)
3,000
P 3,000

P 340,000
(340,000)
-

L
Daza

P 112,000

P 5,000

P 8,000

P 112,000
(112,000)
-

P 5,000

P 8,000

C A
Calma
(2/5)
P 95,000
(68,000)
P 27,000

P 5,000

P 8,000

P 27,000

-

-

(5,000)
-

-

-

-

-

O A N
Esteban

-

P 8,000
( 8,000)
-

P 27,000
( 25,000)
P 2,000

-

-

P 2,000

P I
T A L
Daza
Esteban

(2/5)
(1/5)
P 60,000
P 80,000
(68,000)
(34,000)
P( 8,000) P 46,000
P( 8,000)
5,000
P(3,000)
P(3,000)
3,000
-

P 46,000
P 46,000
(45,000)
P 1,000
P 1,000


Chapter 3 – Partnership Liquidation
Suggested Answers

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Problem 3- 2 (Case 4)
Calma, Daza and Esteban
Statement of Liquidation
January, 2009

Cash
Balances before liquidation
Sale of assets & distribution of loss
Balances
Payment of liabilities
Balances
Offset of loan against debit balance in the
capital account
Balances
Payment to partners
Balances
Additional investment by Daza
Payment to partners

P 20,000
125,000
P 145,000
( 112,000)
P 33,000
P 33,000
( 33,000)
21,000
P 21,000

Other
Assets
P 340,000
(340,000)
-

Liabilities

L
Daza

O A N
Esteban

P 112,000

P 5,000

P 8,000

P 112,000
(112,000)
-

P 5,000

P 8,000

C A P I
T
Calma
Daza
(2/5)
(2/5)
P 95,000
P 60,000

(86,000)
(86,000)
P 9,000
P(26,000)

P 5,000

P 8,000

P 9,000

P(26,000)

P 9,000

5,000
P(21,000)

P 9,000

-

-

(5,000)
-

-

-

-

P 8,000
( 8,000)
-

-

-

-

-

P 9,000

P(21,000)
21,000
-

A L
Esteban
(1/5)
P 80,000
(43,000)
P 37,000
P 37,000
P 37,000
(25,000)

P 12,000
P 12,000


Chapter 3 – Partnership Liquidation
Suggested Answers

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Problem 3 – 2 (Case 5)
Calma, Daza and Esteban
Statement of Liquidation
January, 2009
Other
Cash
Assets
Liabilities
Balances before liquidation
Sale of assets & distribution of loss
Balances
Payment of liabilities
Balances
Offset of loan against debit balance in the
capital account
Balances
Additional investment by Calma and Daza
Payment of liabilities, loan and capital

P 20,000
90,000

P 110,000
( 110,000)
40,000
P 40,000

P 340,000
(340,000)
-

L O A N
Daza
Esteban

P 112,000

P 5,000

P 8,000

P 112,000
(110,000)
P 2,000

P 5,000

P 8,000

C A P I
T A L
Calma

Daza
Esteban
(2/5)
(2/5)
(1/5)
P 95,000
P 60,000 P 80,000
(100,000) (100,000)
(50,000)
P( 5,000) P(40,000) P 30,000

P 5,000

P 8,000

P( 5,000)

P(40,000)

P( 5,000)
5,000
-

5,000
P(35,000)
35,000
-

-

P

2,000

(5,000)
-

-

P

2,000

-

P 8,000
P 8,000

P 30,000
P 30,000
P 30,000


Chapter 3 – Partnership Liquidation
Suggested Answers

Problem
1.

page

3-4

Estrella, Capital
Estrella, Drawing
Total interest of Estrella
Cash received by Estrella

Share of Estrella in the loss on
liquidation
Fractional share of Estrella
Total loss on liquidation

P 144,000
( 12,000)
P 132,000
111,000
P 21,000

3.

÷ 2/10
P 105,000

a.

b.
c.

Cash

Eugenio, Capital
Esteban, Capital
Estrella, Capital
Other Assets

463,000
52,500
31,500
21,000

Liabilities
Cash

200,000

Esteban, Loan
Eugenio, Capital
Esteban, Capital
Estrella, Capital
Cash

40,000
79,500
102,500
111,000

568,000

200,000

333,000

2.
Eugenio , Esteban and Estrella
Statement of Liquidation
January 1 – 31, 2008

Balances before liquidation
Sale of other assets & distribution of loss
Balances
Payment of liabilities
Balances
Payment to partners

Cash
P 70,000
463,000
P 533,000
(200,000)
P 333,000
( 333,000)

Other
Assets
P 568,000
( 568,000)

Liabilities
P 200,000
P 200,000

( 200,000)

Esteban,
Loan
P 40,000
P 40,000

Eugenio
(5/10)
P 132,000
( 52,500)
P 79,500

P 40,000
( 40,000)

P 79,500
( 79,500)

CAPI TAL
Esteban
Estrella
(3/10)
(2/10)
P 134,000
P132,000
( 31,500) ( 21,000)
P 102,500
P 111,000
P 102,500

(102,500)

P 111,000
( 111,000)


Chapter 3 – Partnership Liquidation
Suggested Answers

page

Problem 3 - 6
QRS Partnership
Statement of Liquidation
July to September, 2008

Balances before liquidation
July:
Sale of assets
Payment of liabilities
Payment of liquidation expenses
Payment of loan
Balances
August: Sale of assets
Payment of liquidation expenses
Payment of loan and capital
Balances
Sept.: Sale of assets
Payment of liquidation expenses
Additional loss to Roman & Silva

Payment to partners

P
(
(
P
(
P
(
P
(
P
(
P

Cash
150,000
1,170,000
1,215,000)
7,500)
97,500
67,500)
30,000
66,000
7,500)
88,500
58,500)
30,000
165,000
7,500)

187,500

P 187,500

Other Assets
P2,010,000
( 1,530,000)

Accounts
Payable
P1,215,000

Roman,
Loan
P150,000

Quizon
P300,000
( 180,000)

C A P I T A L
Roman
Silva
P270,000
P225,000
( 108,000)
( 72,000)

( 1,215,000)
P 480,000

-

P 480,000
( 105,000)

-

P 375,000

-

P 375,000
( 375,000)

-

P150,000
( 67,500)
P 82,500
P 82,500
( 41,100)
P 41,400

-

-

P

41,400

-

-

P

41,400

( 3,750)
P116,250

( 2,250)
P159,750

( 1,500)
P151,500

P116,250
( 19,500)
( 3,750)
P 93,000

P159,750
( 11,700)
( 2,250)
P145,800

P 93,000

( 105,000)
( 3,750)
(P 15,750)
15,750
-

P145,800
( 63,000)
( 2,250)
P 80,550
( 9,450)
P 71,100

P151,500
( 7,800)
( 1,500)
P142,200
( 17,400)
P124,800
( 42,000)
( 1,500)
P 81,300
( 6,300)
P 75,000


Chapter 3 – Partnership Liquidation
Suggested Answers

page

Problem 3 - 5
JKLM Trading
Statement of Liquidation
February 1 - March 31, 2008

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

Cash
P 100,320
49,320
( 17,750)
( 8,220)
P 123,670
( 120,060)
P 3,610

(
(
P
(
P

48,330
3,610)
7,380)
40,950
40,950)
---------

Other
Assets
P 193,530

Liabilities
P 21,360

Jocson
Loan
P 15,000

( 66,060)

C
A
Jocson
P 24,120

P
I
Kaimo
P 96,480

T
A
Legarda
P 109,020

L
Manabat
P 27,870

( 3,348)

( 5,022)

( 5,022)

( 3,348)

( 1,644)
P 19,128

( 2,466)
P 88,992
(49,770)
P 39,222

( 2,466)
P 101,532
( 62,310)
P 39,222

( 1,644)
P 22,878

( 17,750)
P 127,470

P 3,610

P 127,470

P 3,610

P 15,000
( 7,980)
P 7,020

( 44,850)

P 19,128
696

1,044

1,044

P 22,878
696

( 3,610)
P 82,620

p --------

P 82,620

P --------

P 7,020
7,020
P -------

( 1,476)
P 18,348
( 1,824)
P 16,524

( 2,214)
P 38,052
(13,266)
P 24,786

( 2,214)
P 38,052
( 13,266)

P 24,786

( 1,476)
P 22,098
( 5,574)
P 16,524


Chapter 3 – Partnership Liquidation
Suggested Answers

page

Problem 3 - 8
Req. 2
Neri, Ordan and Pacia
Statement of Liquidation
January 1 - March 31, 2008

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 customers & dist. of
loss
Payment of liquidation expenses
Payment to partners

Cash
P 19,000

Other
Assets
P 191,000

112,000
( 4,400)
( 38,000)
P 88,600
( 16,000)
P 72,600

(112,000)

36,000
( 2,800)
(38,000)
P 67,800

( 19,800)
P 48,000

( 36,000)

Liabilities
P 77,000

P 79,000

( 38,000)
P 39,000

P 79,000

P 39,000

Pacia,
Loan
P 9,000

P 9,000
( 9,000)
-

P 43,000

( 39,000)
-

-

P 43,000

-

-

35,000

( 43,000)

( 4,000)
P( 79,000)

-

-

-

Sal. Pay.
to Neri
P 6,000

C A P I T
Neri
Ordan
P 50,000
P 28,000

A L
Pacia
P 40,000

( 2,200)

( 1,100)

( 1,100)

P 6,000

P 47,800

P 26,900

P 6,000

P 47,800

P 26,900

P 38,900
( 7,000)
P 31,900

P 6,000
( 6,000)
-

( 1,400)
500
P 46,900
( 1,400)
P 45,500

700)
250
P 26,450
( 3,700)
P 22,750

700)
250
P 31,450
( 8,700)
P 22,750

( 4,000)

( 2,000)

( 2,000)

( 2,000)
P 39,500

( 1,000)
P 19,750

( 1,000)
P 19,750

-

(

(


Chapter 3 – Partnership Liquidation
Suggested Answers

page

Problem 3 -8
Requirement No 1

Neri, Ordan and Pacia
Cash Priority Program
January 1, 2008

Neri
Capital balances before liquidation
P 50,000
Add Loan balances
6,000
Total partners’ interest
P 56,000

Profit and loss ratio
÷ 50%
Loss absorption balance
P112,000
allocation I - Cash to Pacia reducing LAB to an amount reported
for Neri and Ordan. Reduction of P84,000 requires payment
of 25% of P 84,000
Balances
P112,000
Allocation II - Further cash distributions may be made in the profit and loss raio
SCHEDULE OF CASH DISTRIBUTION:
Amount
January:
Cash available
P 16,000
Allocation I:
Payable to Pacia
16,000
February:

Cash available
Allocation I:
Payable to Pacia
Allocation II
Payable according
to P & L ratio

Neri
-

Ordan

Pacia

---------

P 16,000

P 19,800
5,000
P 14,800
-

P 5,000
P 7,400
P 7,400

P 3,700
P 3,700

3,700
P 8,700

Ordan
P 28,000

Neri

P 28,000
÷ 25%

P112,000

Pacia
P 40,000
9,000
P 49,000
÷ 25%
P196,000

P112,000

( 84,000)
P112,000

_______
--------

Ordan

Pacia

_______
---------

P 21,000
P 21,000


Chapter 3 – Partnership Liquidation
Suggested Answers

page

Problem 3 - 7
Requirement 3
Tabora, Ureta and Veloso
Statement of Liquidation
January 1 to April 30, 2008

Balances before liquidation
January:
Sale of assets
Payment to 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

Cash
15,000
(15,000)

40,000
( 40,000)

Other
Assets
P 338,000

30,000
P 30,000
(30,000)

O

A N
Ureta
Veloso
P 30,000 P 13,000

C A P I T A L
Tabora
Ureta
P 120,000 P 90,000

Veloso
P 40,000

P 45,000

(15,000)
P15,000

P 13,000

P 120,000

P 90,000

P 40,000

( 21,250)
P 23,750

(15,000)
-

P 13,000

P 120,000

( 3,750)
P 86,250

P 40,000

(23,750)
-

-

(13,000)

-

( 23,500)
P 96,500

( 28,350)
P 57,900

( 1,400)
P 38,600

-

-

-

( 81,500)
P 15,000
P 15,000

( 48,900)
P 9,000
P 9,000

(32,600)
P 6,000
P 6,000

( 15,000)

P 323,000
( 40,000)
P 283,000

90,000
( 90,000)
-

L
Tabora
P 45,000

( 90,000)
P 193,000
( 193,000)
-


Chapter 3 – Partnership Liquidation
Suggested Answers

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