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Problem #2 Lump-Sum Liquidation With Loss On Realization

The partners Miranda, Leon, and Estoque liquidated their partnership. They sold non-cash assets for ₱2.15 million but realized a ₱450,000 loss. They distributed the ₱450,000 loss according to each partner's profit/loss ratio of 1/3 each. They then paid ₱750,000 in liabilities leaving ₱1.55 million to distribute to the partners based on their capital balances of ₱250,000 for Miranda, ₱450,000 for Leon, and ₱850,000 for Estoque.

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2K views

Problem #2 Lump-Sum Liquidation With Loss On Realization

The partners Miranda, Leon, and Estoque liquidated their partnership. They sold non-cash assets for ₱2.15 million but realized a ₱450,000 loss. They distributed the ₱450,000 loss according to each partner's profit/loss ratio of 1/3 each. They then paid ₱750,000 in liabilities leaving ₱1.55 million to distribute to the partners based on their capital balances of ₱250,000 for Miranda, ₱450,000 for Leon, and ₱850,000 for Estoque.

Uploaded by

jelai anselmo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Problem #2

Lump-Sum Liquidation with Loss on Realization

Miranda, Leon and Estoque


Statement of Liquidation
March 31,2018

Cash
Profit and Loss Percentages
Balances before Liquidation ₱150,000
Realization of Non-Cash Assets and Distribution of Losses 2,150,000
Balances 2,300,000
Payment of Liabilities to Outsiders (750,000)
Balances 1,550,000
Payments to Partners (1,550,000)

Sale of Non-Cash Assets

Cash 2,150,000
Loss on Realization 450,000
Non-Cash Assets

Distribution of Loss on Realization based on Partners P/L Ratio

Miranda, Capital 150,000


Leon, Capital 150,000
Estoque, Capital 150,000
Loss on Realization

Payment of Liabilities

Liabilities 750,000
Cash

Distribution of Cash to Partners


Miranda, Capital 250,000
Leon, Capital 450,000
Estoque, Capital 850,000
Cash
Miranda, Leon and Estoque
Statement of Liquidation
March 31,2018

Other Assets Liabilities Miranda, Capital Leon, Capital Estoque, Capital


1/3 1/3 1/3
₱2,600,000 ₱750,000 ₱400,000 ₱600,000 ₱1,000,000
(2,600,000) (150,000) (150,000) (150,000)
- 750,000 250,000 450,000 850,000
(750,000)
- - 250,000 450,000 850,000
(250,000) (450,000) (850,000)

2,600,000

450,000

750,000
1,550,000

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