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    Answer Prob 1 and 2

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    machelle francisco
    The document contains information about two partnership problems involving the distribution of cash to partners after liquidating assets and paying liabilities. For problem 1, the total capital of the three partners was P2 million, with cash of P2.3 million available after selling assets and paying liabilities. For problem 2, the total capital was also P2 million, but there was a loss on realization, resulting in P1.55 million of cash available for distribution. Both problems provide journal entries to record the transactions. The final section discusses incorporation of the partnership.

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    Answer Prob 1 and 2

    Uploaded by

    machelle francisco
    158 views3 pages
    The document contains information about two partnership problems involving the distribution of cash to partners after liquidating assets and paying liabilities. For problem 1, the total capital of the three partners was P2 million, with cash of P2.3 million available after selling assets and paying liabilities. For problem 2, the total capital was also P2 million, but there was a loss on realization, resulting in P1.55 million of cash available for distribution. Both problems provide journal entries to record the transactions. The final section discusses incorporation of the partnership.

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    answer-Prob-1-and-2

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    The document contains information about two partnership problems involving the distribution of cash to partners after liquidating assets and paying liabilities. For problem 1, the total capital of the three partners was P2 million, with cash of P2.3 million available after selling assets and paying liabilities. For problem 2, the total capital was also P2 million, but there was a loss on realization, resulting in P1.55 million of cash available for distribution. Both problems provide journal entries to record the transactions. The final section discusses incorporation of the partnership.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    158 views3 pages

    Answer Prob 1 and 2

    Uploaded by

    machelle francisco
    The document contains information about two partnership problems involving the distribution of cash to partners after liquidating assets and paying liabilities. For problem 1, the total capital of the three partners was P2 million, with cash of P2.3 million available after selling assets and paying liabilities. For problem 2, the total capital was also P2 million, but there was a loss on realization, resulting in P1.55 million of cash available for distribution. Both problems provide journal entries to record the transactions. The final section discusses incorporation of the partnership.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Problem 1.

    Arcenas, Capital Dulay, Capital Laurente, Capital Total


    P900,000 P500,000 P600,000 P2,000,000
    100,000 100,000 100,000 300,000___
    P1,000,000 P600,000 P700,000 P2,300,000*

    Cash from realization of non-cash asset P2,650,000


    Plus: Cash 50,000
    Less: Payment for liabilities 400,000__
    Remaining cash available for distribution P2,300,000

    Journal entries:

    Sale of non-cash assets

    Cash P2,650,000
    Non-cash asset P2,350,000
    Gain on realization P300,000

    Distribution of gain on realization to the partners

    Gain on realization P300,000


    Arcenas, Capital P100,000
    Dulay, Capital P100,000
    Laurente, Capital P100,000

    Payment of liabilities

    Liabilities P400,000
    Cash P400,000
    Distribution of cash to the partners

    Arcenas, Capital P1,000,000


    Dulay, Capital P600,000
    Laurente, Capital P700,000
    Cash P2,300,000

    Problem 2

    Miranda, Capital Leon, Capital Estoque, Capital Total


    P400,000 P600,000 P1,000,000 P2,000,000
    (150,000) (150,000) (150,000) (450,000)__
    P250,000 P450,000 P850,000 P1,550,000*

    Cash from realization of non-cash asset P2,150,000


    Plus: Cash 150,000
    Less: Payment for liabilities 750,000__
    Remaining cash available for distribution P1,550,000

    Journal entries:

    Sale of non-cash assets

    Cash P2,150,000
    Loss on realization P450,000
    Other asset P2,600,000

    Distribution of gain on realization to the partners

    Miranda, Capital P150,000


    Leon, Capital P150,00
    Estoque, Capital P150,000
    Loss on realization P450,000

    Payment of liabilities

    Liabilities P750,000
    Cash P750,000
    Distribution of cash to the partners

    Miranda, Capital P250,000


    Leon, Capital P450,000
    Estoque, Capital P850,000
    Cash P1,550,000

    Incorporation of partnership

    Total B1 B2
    Capital, before adjustment 309,000 94,800 214,200
    Less: net adjustment 35,400 11,800 23,600
    Capital after adjustment 273,600 83,000 190,600
    Less: Portion covered by ordinary
    share, par P10 (720 share to each
    partner) 14,400 7,200 7,200
    Portion to be covered by
    preference share, par P100 259,200 75,800 183,400

    *FV, (P40,000+68,000+180,600 – BV, (P60,000 +90,000 +174,000)

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