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Assignment on Partnership Liquidation

The document outlines two cases of liquidation: a lump-sum liquidation and an installment liquidation. In the lump-sum case, cash and non-cash assets are settled with liabilities and distributed to partners, while the installment case details the collection and sale of assets, resulting in a loss allocation between partners. The final amounts received by partners after losses are calculated and presented.

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Jenny Marie Pelares
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4 views2 pages

Assignment on Partnership Liquidation

The document outlines two cases of liquidation: a lump-sum liquidation and an installment liquidation. In the lump-sum case, cash and non-cash assets are settled with liabilities and distributed to partners, while the installment case details the collection and sale of assets, resulting in a loss allocation between partners. The final amounts received by partners after losses are calculated and presented.

Uploaded by

Jenny Marie Pelares
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 PDF, TXT or read online on Scribd
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PELARES, JENNY MARIE M.

MARCH 23, 2025


ACCTG 111E – MWF (7:30-9:30AM) Sir Mullon
Case 1 : Lump-sum Liquidation

Cash Non-cash Liabilities Payable to A, Capital B, Capital


Assets B
Balances ₱20,000 ₱480,000 ₱30,000 ₱20,000 ₱250,000 ₱200,000
before
liquidation
Realization 372,000 (480,000) (64,800) (43,200)
Balance ₱392,000 ₱30,000 ₱20,000 ₱185,200 ₱156,800
Liquidation
Expense (12,000) (7,200) (4,800)
Balance ₱380,000 ₱30,000 ₱20,000 ₱178,000 ₱152,000
Settlement
of
Liabilities
(outsiders) (30,000) (30,000)
Balance ₱350,000 ₱20,000 ₱178,000 ₱152,000
Payment to
Partners (350,000) (20,000) (178,000) (152,000)

Distribution of Cash to Partners


B, Loan ₱20,000
A, Capital 178,000
B, Capital 152,000
Cash ₱350,000
#
Case 2: Installment Liquidation
Collection from accounts receivable (60k/2) ₱30,000
Sale of inventory (120k x 75% x 80%) 72,000
Sale of equipment 185,000
Liquidation Expenses (12,000)
Estimated future liquidation costs (5,000)
Net Proceeds ₱270,000
Carrying amount of all non-cash assets, except
receivable from A (470,000)
Loss ₱200,000

A B Total
Capital Balance ₱250,000 ₱200,000 ₱450,000
Payable to (receivable
from) Partner (10,000) 20,000 10,000
Total ₱240,000 ₱220,000 ₱460,000
Allocation of loss
-200k x 60% & 40% (120,000) (80,000) (200,000)
Amount received by
the partners ₱120,000 ₱140,000 ₱260,000

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