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    Doremi Partnership: Do, Capital (20%) Re, Capital (30%) Mi, Capital (50%)

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    Guiana Wacas
    The document provides the opening balance sheet for the Doremi Partnership. It then lists a series of transactions that occurred during the liquidation process from June to August. These include the realization of accounts receivable and inventories for less than their book values, payments made to outside creditors from cash proceeds, the sale of land and buildings, payment of liquidation expenses, and subsequent distributions of remaining cash to the partners. The respondent is asked to prepare a schedule of safe payments, a liquidation statement, and journal entries to record the transactions during the liquidation period.

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    Doremi Partnership: Do, Capital (20%) Re, Capital (30%) Mi, Capital (50%)

    Uploaded by

    Guiana Wacas
    438 views4 pages
    The document provides the opening balance sheet for the Doremi Partnership. It then lists a series of transactions that occurred during the liquidation process from June to August. These include the realization of accounts receivable and inventories for less than their book values, payments made to outside creditors from cash proceeds, the sale of land and buildings, payment of liquidation expenses, and subsequent distributions of remaining cash to the partners. The respondent is asked to prepare a schedule of safe payments, a liquidation statement, and journal entries to record the transactions during the liquidation period.

    Original Title

    DOREMI-PARTNERSHIP-Installment-Liquidation

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    The document provides the opening balance sheet for the Doremi Partnership. It then lists a series of transactions that occurred during the liquidation process from June to August. These include the realization of accounts receivable and inventories for less than their book values, payments made to outside creditors from cash proceeds, the sale of land and buildings, payment of liquidation expenses, and subsequent distributions of remaining cash to the partners. The respondent is asked to prepare a schedule of safe payments, a liquidation statement, and journal entries to record the transactions during the liquidation period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    438 views4 pages

    Doremi Partnership: Do, Capital (20%) Re, Capital (30%) Mi, Capital (50%)

    Uploaded by

    Guiana Wacas
    The document provides the opening balance sheet for the Doremi Partnership. It then lists a series of transactions that occurred during the liquidation process from June to August. These include the realization of accounts receivable and inventories for less than their book values, payments made to outside creditors from cash proceeds, the sale of land and buildings, payment of liquidation expenses, and subsequent distributions of remaining cash to the partners. The respondent is asked to prepare a schedule of safe payments, a liquidation statement, and journal entries to record the transactions during the liquidation period.

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    © All Rights Reserved
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    DOREMI PARTNERSHIP

    DEBIT CREDIT
    CASH P15,000
    ACCOUNTS RECEIVABLE P20,000
    INVENTORIES P65,000
    LAND P50,000
    BUILDING P100,000
    FURNITURE P50,000
    LOANS RECEIVABLE FROM Mi P10,000
    ACCOUNTS PAYABLE P80,000
    LOANS PAYABLE TO Do P10,000
    Do, Capital (20%) P40,000
    Re, Capital (30%) P60,000
    Mi, Capital (50%) P50,000
    ACCUM. DEPN. - BUILDING P40,000
    ACCUM. DEPN. - FURNITURE P30,000

    The following transactions and events occurred during the liquidation process:

    June 10
    Inventories and accounts receivable were realized at P20,000 and
    P17,000 respectively.

    June 20
    P50,000 cash were used to pay outside creditors.

    July 5 Land and building were sold for P100,000.


    July 10 Liquidation expenses of P3,000 were paid.
    July 15 Remaining outside creditors were paid from available cash.
    July 20 Remaining available cash were distributed to partners.
    August 10 Remaining noncash assets were sold for P5,000.
    August 15 Paid to partners the remaining cash.
    Required: Prepare the following: 
    A. Schedule of safe payments

    DoReMi Partnership
    Safe Payment Schedule
    (Schedule 1)
    PARTNERS
    Do Re Mi
    Profit and Loss agreement 20% 30% 50%

    Combined claims of partners


    Less: Loss on realization
    Balance
    Less Maximum Loss Possible:
    Unsold non-cash assets
    Estimated Liabilities
    Expected Liquidation Expenses
    TOTAL
    Capital Balances
    Deficiency Absorption
    Capital Balances
    1st Payment of Cash

    DoReMi Partnership
    Safe Payment Schedule
    (Schedule 2)
    PARTNERS
    Do Re Mi
    Profit and Loss agreement 20% 30% 50%

    Combined claims of partners


    Less: Loss on realization
    Balance
    Less Maximum Loss Possible:
    Unsold non-cash assets
    Estimated Liabilities
    Expected Liquidation Expenses
    TOTAL
    Capital Balances
    Deficiency Absorption
    Capital Balances
    1st Payment of Cash
    DoReMi Partnership
    Safe Payment Schedule
    (Schedule 3)
    PARTNERS
    Do Re Mi
    Profit and Loss agreement 20% 30% 50%

    Combined claims of partners


    Less: Loss on realization
    Balance
    Less Maximum Loss Possible:
    Unsold non-cash assets
    Estimated Liabilities
    Expected Liquidation Expenses
    TOTAL
    Capital Balances
    Deficiency Absorption
    Capital Balances
    1st Payment of Cash

    B. Liquidation statement
    C. Journal entries for the following:

    1. Sale on June 10 and the distribution of gain or loss on realization. (Compound entry)

    2. Payment to outside creditors on June 20.


    3. Sale on July 5 and the distribution of gain or loss on realization. (Compound entry)

    4. Actual liquidation expense paid on July 10.

    5. Payment to outside creditor on July 15.

    6. First cash distribution to the partners on July 20.

    7. Sale on August 10 and the distribution of gain or loss on realization. (Compound entry)

    8. Final payment to the partners on August 15.

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