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Assignment 6.2 Liquidation

The document provides information on the balance sheet of CDO Partnership as of December 31, 2016. It then summarizes the activities involved in liquidating the partnership business using both lump sum and installment methods. Under lump sum liquidation, the assets are realized at once, expenses are deducted, obligations are paid, and any remaining amount is distributed to partners. Installment liquidation involves three installments over time, with realization of different assets, deduction of expenses, payments, and distributions to partners during each period.

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Anna Mae Nebres
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908 views

Assignment 6.2 Liquidation

The document provides information on the balance sheet of CDO Partnership as of December 31, 2016. It then summarizes the activities involved in liquidating the partnership business using both lump sum and installment methods. Under lump sum liquidation, the assets are realized at once, expenses are deducted, obligations are paid, and any remaining amount is distributed to partners. Installment liquidation involves three installments over time, with realization of different assets, deduction of expenses, payments, and distributions to partners during each period.

Uploaded by

Anna Mae Nebres
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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On December 31, 2016, the balance sheet of CDO Partnership is as follows:

Cash                                                   15,360
Noncash Assets                          271,360
Accounts Payable                        51,200
Loan Payable to Dorie               20,480
Cherry, Capital                             49,152
Dorie, Capital                               73,728
Oscar, Capital                              92,160
Profit and losses were shared as follows; Cherry, 30%; Dorie, P30% and Oscar, 40%. It was decided to liquidate the business. T

Required: Prepare Statement of Liquidation using:


a. Lumpsum Liquidation
b. Installment Liquidation (Prepare Schedule of Safe Payments if needed)

a.) Lumpsum Liquidation

30%
Cash Non cash assets AP Loan Payable to Cherry, Capital
Beg Balance 15,360.00 271,360.00 51,200.00 20,480.00 49,152.00
Realization 168,960.00 -271,360.00 - 30,720.00
Total 184,320.00 0 51,200.00 20,480.00 18,432.00
Liquidation Expen- 12,500.00 - 3,750.00
Total 171,820.00 0 51,200.00 20,480.00 14,682.00
Payment to outsid -51,200.00 -51,200.00
Total 120,620.00 0 0 20,480.00 14,682.00
Loan Payable -20,480.00 -20,480.00
Total 100,140.00 0 0 0 14,682.00
Distribute to part -100,140.00 -14,682.00
Total 0 0 0 0 0

b.) Installment Liquidation


30%
Cash Non cash assets AP Loan Payable to Cherry, Capital
Beg Balance 15,360.00 271,360.00 51,200.00 20,480.00 49,152.00
1st- realization 81,920.00 -133,120.00 - 15,360.00
Total 97,280.00 138,240.00 51,200.00 20,480.00 33,792.00
Liquidation Expen- 4,100.00 - 1,230.00
Total 93,180.00 138,240.00 51,200.00 20,480.00 32,562.00
Payment to outsid -40,000.00 -40,000.00
Total 53,180.00 138,240.00 11,200.00 20,480.00 32,562.00
Distribution 33,354.00 68,181.43
Balance 86,534.00 138,240.00 11,200.00 20,480.00 100,743.43
2nd- realization 51,200.00 -76,800 - 7,680.00
Total 137,734.00 61,440.00 11,200.00 20,480.00 93,063.43
Liquidation Expen -4,800.00 - 1,440.00
Total 132,934.00 61,440.00 11,200.00 20,480.00 91,623.43
Payment to outsid -11,200 - 11,200.00
Total 121,734.00 61,440.00 0 20,480.00 91,623.43
Distribution - 119,734.00 - 49,466.00 - 72,591.43
Balance 2,000.00 61,440.00 0- 28,986.00 19,032.00
3rd- realization 35,840.00 -61,440.00 - 7,680.00
Total 37,840.00 0 0- 28,986.00 11,352.00
Liquidation Expen -3,600.00 - 1,080.00
Total 34,240.00 0 0- 28,986.00 10,272.00
Loan Payable - 28,986.00 28,986.00
Total 5,254.00 0 0 0 10,272.00
Distribution - 5,254.00 - 10,272.00
Balance 0 0 0 0 0
decided to liquidate the business. The following is a summary of the realization and liquidation Expense activities.  

30% 40%
Dorie, Capital Oscar, Capital
73,728.00 92,160.00
- 30,720.00 - 40,960.00 168,960.00-271,360.00 loss -102,400.00
43,008.00 51,200.00
- 3,750.00 - 5,000.00
39,258.00 46,200.00

39,258.00 46,200.00

39,258.00 46,200.00
-39,258.00 -46,200.00
0 0

30% 40%
Dorie, Capital Oscar, Capital
73,728.00 92,160.00
- 15,360.00 - 20,480.00 81,920.00-133,120.00 loss -51,200.00
58,368.00 71,680.00
- 1,230.00 - 1,640.00
57,138.00 70,040.00
57,138.00 70,040.00
- 34,827.43
57,138.00 35,212.57
- 7,680.00 - 10,240.00 51,200-76,800 Loss -25,600.00
49,458.00 24,972.57
- 1,440.00 - 1,920.00
48,018.00 23,052.57

48,018.00 23,052.57
2,323.43
48,018.00 25,376.00
- 7,680.00 - 10,240.00 35,840-61,440 Loss -25,600.00
40,338.00 15,136.00
- 1,080.00 - 1,440.00
39,258.00 13,696.00

39,258.00 13,696.00
- 39,258.00 - 13,696.00
0 0
Expense activities.  

Schedule of safe payments- 1st


Cherry Dorie Oscar
Capital balance before distr 32,562.00 57,138.00 70,040.00
Loan payable 20,480.00 Cherry 30
Partner's interest 32,562.00 77,618.00 70,040.00 Oscar 40
Theoretical loss - 41,772.00 - 41,772.00 - 55,696.00 -139,240.00 70
total - 83,544.00 35,846.00 14,344.00
Absorption 15,362.57 - 35,846.00 20,483.43
Free interest - 68,181.43 0 34,827.43

Schedule of safe payments- 2nd


Cherry Dorie Oscar
Capital balance before distr 91,623.43 48,018.00 23,052.57
Loan payable 20,480.00
Partner's interest 91,623.43 68,498.00 23,052.57
Theoretical loss - 19,032.00 - 19,032.00 - 25,376.00 -63,440
Free interest 72,591.43 49,466.00 - 2,323.43
42.86%
57.14%

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