The partnership of Duro, Kemp, and Roth is to be liquidated as soon as possible after...
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The partnership of Duro, Kemp, and Roth is to be liquidated as soon as possible after December 31, 2021. All cash on hand except for a P20,000 contingency balance is to be distributed at the end of each month until the liquidation is completed. Profits and losses are shared 50 percent, 30 percent, and 20 percent by Duro, Kemp, and Roth, respectively. The partnership balance sheet at December 31, 2021, contains the following: P 300,000 Assets Cash P Accounts receivable Liabilities and Capital 240,000 Accounts payable 280,000 Note payable net Loan to Roth Inventories Land Equipment - net Goodwill 40,000 Loan from Kemp 400,000 Duro, Capital (50%) 100,000 Kemp, Capital (30%) 300,000 Roth, Capital (20%) 40,000 P 1,400,000 200,000 20,000 340,000 340,000 200,000 P 1,400,000 Jan 2022 Feb 2022 Mar 2022 Apr 2022 The loan to Roth is offset against his capital balance, the goodwill is written off, P200,000 is collected on account, inventory items that cost P160,000 are sold for P200,000, non- owner liabilities are settled at recorded values, and cash is distributed. Equipment with a book value of P80,000 is sold for P60,000, the remaining inventory items are sold for P180,000, liquidation expenses of P4,000 are paid, a liability of P8,000 is discovered and paid, and cash is distributed. The land is sold for P150,000, liquidation expenses of P5,000 are paid, and cash is distributed. Additional equipment is sold for P150,000, the remaining equipment and receivables are written off, and all cash on hand is distributed in final liquidation of the partnership. Requirement: Prepare the cash distribution plan. The partnership of Duro, Kemp, and Roth is to be liquidated as soon as possible after December 31, 2021. All cash on hand except for a P20,000 contingency balance is to be distributed at the end of each month until the liquidation is completed. Profits and losses are shared 50 percent, 30 percent, and 20 percent by Duro, Kemp, and Roth, respectively. The partnership balance sheet at December 31, 2021, contains the following: P 300,000 Assets Cash P Accounts receivable Liabilities and Capital 240,000 Accounts payable 280,000 Note payable net Loan to Roth Inventories Land Equipment - net Goodwill 40,000 Loan from Kemp 400,000 Duro, Capital (50%) 100,000 Kemp, Capital (30%) 300,000 Roth, Capital (20%) 40,000 P 1,400,000 200,000 20,000 340,000 340,000 200,000 P 1,400,000 Jan 2022 Feb 2022 Mar 2022 Apr 2022 The loan to Roth is offset against his capital balance, the goodwill is written off, P200,000 is collected on account, inventory items that cost P160,000 are sold for P200,000, non- owner liabilities are settled at recorded values, and cash is distributed. Equipment with a book value of P80,000 is sold for P60,000, the remaining inventory items are sold for P180,000, liquidation expenses of P4,000 are paid, a liability of P8,000 is discovered and paid, and cash is distributed. The land is sold for P150,000, liquidation expenses of P5,000 are paid, and cash is distributed. Additional equipment is sold for P150,000, the remaining equipment and receivables are written off, and all cash on hand is distributed in final liquidation of the partnership. Requirement: Prepare the cash distribution plan.
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ANSWER Initial Cash CalculationCash at December 31 2021 280000January 2022Cash inflowCollection on a... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
Posted Date:
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