Problem 2

The DSV Partnership decided to liquidate the partnership as of June 30, 2020. The balance sheet of the partnership as of this date is presented as follows:

DSV Partnership

Balance Sheet

As of June 30, 2020

Month Assets Sold Carrying Amount amount realized Inventories P50,000 P45,000 Accounts 60,000 40,000 receivable(net) Property, plant and 400,000 305,000 equipment gust Inventories 25,000 18,000 Accounts 10,000 4,000 receivable(net) Accounts tember 25,000 10,000 receivable(net) Property, plant and 100,000 45,000 equipmentDD, 55, and W share prots and losses in the ratio 50:30:20. The partners wish to distribute available cash at the end of each month after reserving P10,000 of cash at the end of July and August to meet unexpected liquidation expenses. Actual liquidation expenses incurred and paid each month amounted to P2500. Hints: Distributable cash = Total Ownership capital before distribution - Total possible losses; OR Distributable cash = Cash balance before distribution Cash withheld for future expenses Total possible losses = Remaining noncash assets + Remaining liabilities to 3rd part1r + Cash withheld for future expenses You may use either Schedule of Safe Payments or Cash Priority Program. Total liabilities and capal The personal assets (excluding partnership lean and capital interests) and personal liabilities of each partner as of June 30, 2019, follow: Personal P250000 P450000 P300000 Assets Personal _ ,_ , (270,000) (420,000) {240,000} Llablllt'les Personal Net (P20,000) P30,000 P610000 Worth The DSV Partnership was liquidated during the months of July, August and September. The assets sold and the amounts realized follow: Assets Cash P50,000 Accounts receivable(net) 95,000 Inventories 75,000 Property, Plant and 500,000 Equipment(net) Total Assets P720,000 Liabilities and Capital Accounts payable P405,000 DD, Capital 100,000 SS, Capital 140,000 VV, Capital 75,000