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Accounting for Partnership Liquidation chapter 323 INAME: Score PROFESSOR m 6-27 Section Date Multiple Choice: Installment Liquidation t los sour computation o truction: Encircle the letter corresponding to the best answ n a separate paper pata for questiona 1 to 3 are the ledger balances of Red, White and Blue pa rtnershi p: Cash Noncash assets Accounts payable Red, Capital White, Capital P 60,000 500,000 P 280,000 150,000 70,000 i Blue, Capital Total The partners' profit and loss distribution White and Blue respectively. Th agreement is 40%, 35% and 25% to Red, e partners agreed to liquidate the partnership by installments. 1. If the 1s noncash assets with book value of P300,000 was sold for 250,000 what amount of cash should be distributed to the partners? a. P250,000 b. P 80,000 c. P 30,000 1 d. None 2. If the l*t noncash assets with book value of P250,000 was sold for P225,000, I how much cash will the partner with 1s cash priority receive? I a. P159,000 I b. P 54,000 с. Р 5,000 I d. P 2,000 3. If the 1st noncash assets with book value of P250,000 was sold for P230,000 how much cash will be paid to outside creditors? a P230,000 b. P250,000 c. P280,000 d. P290,000 I Data for questions 4 to 12: agreed Y and Z are partners dividing profit and losses of the partnership in the

Answer 1

Question 1

Correct answer---(C) P30000

Calculations

	Cash	Non cash asset	Accounts payable	Red capital	White capital	Blue capital
	P       60,000.00	P   5,00,000.00	P (2,80,000.00)	P (1,50,000.00)	P     (70,000.00)	P   (60,000.00)
Sale of Non cash asset and record of loss	P    2,50,000.00	P (3,00,000.00)		P       20,000.00	P       17,500.00	P      12,500.00
Balance	P    3,10,000.00	P   2,00,000.00	P (2,80,000.00)	P (1,30,000.00)	P     (52,500.00)	P   (47,500.00)
Payment of accounts payables	P (2,80,000.00)	P                      -	P    2,80,000.00
Balance	P       30,000.00	P   2,00,000.00	P                       -	P (1,30,000.00)	P     (52,500.00)	P   (47,500.00)

Question 2

Correct answer----(c) P5000

Calculations

	Cash	Non cash asset	Accounts payable	Red capital	White capital	Blue capital
	P       60,000.00	P   5,00,000.00	P (2,80,000.00)	P (1,50,000.00)	P     (70,000.00)	P   (60,000.00)
Sale of Non cash asset and record of loss	P   2,25,000.00	P (2,50,000.00)		P       10,000.00	P          8,750.00	P        6,250.00
Balance	P    2,85,000.00	P   2,50,000.00	P (2,80,000.00)	P (1,40,000.00)	P     (61,250.00)	P   (53,750.00)
Payment of accounts payables	P (2,80,000.00)	P                      -	P    2,80,000.00
Balance	P          5,000.00	P   2,50,000.00	P                       -	P (1,40,000.00)	P     (61,250.00)	P   (53,750.00)

Question 3

Correct answer----P280,000

	Cash	Non cash asset	Accounts payable	Red capital	White capital	Blue capital
	P       60,000.00	P   5,00,000.00	P (2,80,000.00)	P (1,50,000.00)	P     (70,000.00)	P   (60,000.00)
Sale of Non cash asset and record of loss	P    2,30,000.00	P (2,50,000.00)		P          8,000.00	P          7,000.00	P        5,000.00
Balance	P    2,90,000.00	P   2,50,000.00	P (2,80,000.00)	P (1,42,000.00)	P     (63,000.00)	P   (55,000.00)
Payment of accounts payables	P (2,80,000.00)	P                      -	P    2,80,000.00
Balance	P       10,000.00	P   2,50,000.00	P                       -	P (1,42,000.00)	P     (63,000.00)	P   (55,000.00)