Instructions: 1. Prepare a liquidation statement. 2. Prepare the journal entries to record the liquidation. Waddams,...

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Instructions: 1. Prepare a liquidation statement. 2. Prepare the journal entries to record the liquidation. Waddams, Brennaman, and Wolff are partners in the Paramount Studios and share profits and losses in a ratio of 5:3:2. On June 30, 20X1; they decided to liquidate the business. The statement of financial position at that date is presented below: Cash Waddams, Loan Non-cash Assets Total Assets P30,000 15,000 135,000 Liabilities Brennaman, Loan Waddams, Capital Brennaman, Capital Wolff, Capital P180,000 Total Liabilities & Equity P40,000 10,000 80,000 36,000 14,000 P180,000 The non-cash assets are sold for P105,000. Instead of requiring a cash payment, all partners allowed Waddams to exercise his right of offset. Instructions: 1. Prepare a liquidation statement. 2. Prepare the journal entries to record the liquidation. Waddams, Brennaman, and Wolff are partners in the Paramount Studios and share profits and losses in a ratio of 5:3:2. On June 30, 20X1; they decided to liquidate the business. The statement of financial position at that date is presented below: Cash Waddams, Loan Non-cash Assets Total Assets P30,000 15,000 135,000 Liabilities Brennaman, Loan Waddams, Capital Brennaman, Capital Wolff, Capital P180,000 Total Liabilities & Equity P40,000 10,000 80,000 36,000 14,000 P180,000 The non-cash assets are sold for P105,000. Instead of requiring a cash payment, all partners allowed Waddams to exercise his right of offset.

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To prepare a liquidation statement and journal entries for the liquidation of Paramount Studios we first need to note the financial position at the on... View the full answer