Scribd
Upload
343 views3 pages

Problem 1:: Cash Avail For First Distribution: P65, 000 Less: Priority Creditors 50,000 Payment To Partners P15,000

The document contains the solutions to 7 accounting problems related to partnerships. Problem 1 involves computing maximum potential loss for 3 partners (A, B, C) and determining who should receive the first distribution of $65,000 based on their balances and loan amounts. Problem 2 calculates the number of preference and ordinary shares to be issued when partnership assets and liabilities are exchanged for corporate shares. Problem 3 states partners Ba and Be would receive $110,500 and $58,500 respectively if liquidation occurs at book value. The solutions to problems 4-6 provide the capital balances of various partners after transactions such as retirements and admissions of new partners.

Uploaded by

Mitch Tokong Minglana
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
Download as docx, pdf, or txt
343 views3 pages

Problem 1:: Cash Avail For First Distribution: P65, 000 Less: Priority Creditors 50,000 Payment To Partners P15,000

The document contains the solutions to 7 accounting problems related to partnerships. Problem 1 involves computing maximum potential loss for 3 partners (A, B, C) and determining who should receive the first distribution of $65,000 based on their balances and loan amounts. Problem 2 calculates the number of preference and ordinary shares to be issued when partnership assets and liabilities are exchanged for corporate shares. Problem 3 states partners Ba and Be would receive $110,500 and $58,500 respectively if liquidation occurs at book value. The solutions to problems 4-6 provide the capital balances of various partners after transactions such as retirements and admissions of new partners.

Uploaded by

Mitch Tokong Minglana
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1/ 3

Ivy T.

Ecat
BSA 301

PROBLEM 1:
a. Compute for the maximum potential loss and rank each partner

ANSWER AND SOLUTION:


A B C
Balance before liquidation
Loan (to) from P (5,000) P10, 000
Capital balances P45,000 30,000 15,000
Total Interest P45, 000 P25, 000 P25, 000
Divided by: Profit and loss ratio 30% 50% 20%
Loss absorption abilities/potential P 150,000 P50, 000 P125, 000

Vulnerability ranking
A: rank 3 B: rank 1 C rank 2
(1 most vulnerable):

b. Assuming 65,000 is available for first distribution, whom should it receive and at
what amount

ANSWER AND SOLUTION:

The 65,000 first distribution will receive by the priority creditor amounting to
P50,000, while A will receive P 12,000 and C will receive P3,000.

A B C total

Balance before liquidation


Loan (to) from P (5,000) P10, 000
Capital balances P45,000 30,000 15,000
Total Interest P45,000 P25,000 P25,000 P95,000
Reduce in equity (24,000) (40,000) (16,000) (80,000)
Payment to partners P21,000 P(15,000) P9,000 P15,000
Additional loss(3:2) (9,000) 15,000 (6,000) ____
Payment to partners P 12,000 P3,000 P15,000

Cash avail for first distribution: P65, 000


Less: priority creditors 50,000
Payment to partners P15,000
PROBLEM 2: Compute for the total number of shares of preference and ordinary share
issued by the corporation in exchange of the assets and liabilities of the partnership.

ANSWER AND SOLUTION:

Assets
Cash P 45,000
Accounts Receivable 40,000
Inventory 68,000
Property and Equipment 180,600
Total Assets P 333,600
Less: Liabilities (60,000)
Amount to be paid P 273,600

Value of Equity shares to be issued to each partner = 720 x 10 = 7, 200


Total amount paid in form of equity shares = 7,200 x 2 = 14,400
Amount to be paid in form of preference shares = 273,600 – 14,400 = 259,200
Total No. of preference shares to be issued = 259,200 / 100 = 2592 shares

PROBLEM 3: If the liquidation takes places at this point and the net assets are realized
at book value, the partners are entitled to:

ANSWER:  

Ba will receive P110, 500, while Be will receive P58, 500 respectively.

PROBLEM 4: After C’s retirement, the capital balances of B and D respectively will be

PROBLEM 5: The capital of A, B, C respectively after the payment and admission of A

ANSWER AND SOLUTION:

A B C
Balance P 250,000 P150,000 P100,000
Revaluation (60,000x5:3:2) 30,000 18,000 12,000
Adjusted capital P280,000 P168,000 P112,000
Multiply: (100%-25%) 75% 75% 75%____
Capital after payment and
Admission Of A P210,000 126,000 P84,000
PROBLEM 6: The partners’ capital balances on December 31,2021 after closing the net
profit and drawing accounts:

ANSWER: A’s Capital balance: P 139,540, while B’s capital balance is: P48, 860

SOLUTION:

A B
P 25,000 -
1,440 -
8,100 P 4,680
34,540 4.680
(20,000) (30,000)
14,540 (25,140)
Add: Capital 125,000 75,000
End, Capital P139,540 P 48,860

PROBLEM 7:

You might also like