Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

problem #13 preparation of Journal Entries for Partnership Liquidation Tugade, Masinsin and Biore are all famous athletes who have been operating a sports memorabilia store

image text in transcribed
problem #13 preparation of Journal Entries for Partnership Liquidation Tugade, Masinsin and Biore are all famous athletes who have been operating a sports memorabilia store for many years. The partnership decided to liquidate its operation rather than sell the business because they are each about to retire and want to go their separate ways. They have been sharing profits in the ratio of 40% to Tugade, 40% to Masinsin, and 20% to Biore. The trial balance for their business on Jan. 1, 2018 follows: Trial Balance Cash January 1, 2018 Accounts Receivable P 42,000 Allowance for Uncollectible Accounts 189,600 Merchandise Inventory 11,100 Prepaid Insurance 293,100 Land 9,000 Office Equipment 120,000 Accu. Depreciation-Office Equipment 31,500 Machinery 10,500 81,600 Accu, Depreciation-Machinery Building 32,100 375,000 Accu. Depreciation-Building 112,500 Notes Payable 120,000 Accounts Payable 220,500 Mortgage Payable 240,000 Tugade, Capital 135,000 Masinsin, Capital 60,000 Biore, Capital 200,100 Totals P1,141,800 P1,141,800 In January 2018, the events took place during the process of liquidating the partnership: Jan. 6 Accounts receivable of P151,500 are collected, and the allowance for uncollectible accounts is written off the books. 9 Merchandise inventory is sold for P160,500. 11 A refund on the prepaid insurance is expected totaling P3,000. 14 Property and equipment were sold lump sum to Sibug Company for P111,000. The mortgage on the building was also transferred to Sibug. 20 The remaining creditors were paid in full. 20 The deficit in Masinsin's capital account was absorbed by Tugade and Blore. 20 The deficit in Tugade's capital account was absorbed by Biore, 24 The remaining partnership cash is distributed to Biore. Required: Prepare the journal entries to record the transactions. Allocate any gain or loss on realization to the partners' capital accounts at the time of the transaction. It is to assumed that any partner with a capital deficiency.is insolvent and will not be able to contribute any personal assets to cover it

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Carl Warren

13th Edition

1133607616, 978-1133607618

More Books

Students also viewed these Accounting questions

Question

What do you like to do for fun/to relax?

Answered: 1 week ago

Question

three principles to better secure networks.

Answered: 1 week ago

Question

13. Give four examples of psychological Maginot lines.

Answered: 1 week ago