Question
Lump-Sum Liquidation B. Apple, Banana and Lemon have decided to liquidate their partnership on Dec. 1, 2020. The statement of financial position is shown below:
Lump-Sum Liquidation B. Apple, Banana and Lemon have decided to liquidate their partnership on Dec. 1, 2020. The
statement of financial position is shown below:
ABL Partnership
Statement of Financial Position
Dec 01, 2020
Assets
Cash P 25,000
Accounts Receivable (net) 75,000
Inventories 100,000
Property and Equipment (net) 300,000
Total Assets P 500,000
Liabilities and Capital
Accounts Payable P240,000
Loan Payable-Bantilles 30,000
Apple, Capital 120,000
Banana, Capital 50,000
Lemon, Capital 60,000
Total Liabilities and Capital P500,000
Additional information:
a) The personal assets (excluding partnership capital and loan interests) and personal liabilities of each partner
as of Dec. 1, 2020, are presented below:
Apple Banana Lemon
Personal assets P250,000 P300,000 P350,000
Personal liabilities (230,000) (240,000) (325,000)
Personal net worth P 20,000 P 60,000 P 25,000
b) Apple, Banana, and Lemon share profits and losses in the ratio 20:40:40, respectively.
c) In the partnership agreement, interest will not accrue on partners' loan balances during the liquidation process.
d) All of the non-cash assets were sold on Dec. 10, 2020 for P260,000.
How to prepare the liquidation journal entries?
How to prepare the statement of liquidation?
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