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    Module 4 Problem 2 PDF

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    ANDREA PLN
    The partnership is being liquidated and the assets sold. Partner LL received $98,000 in cash for her 20% share of the partnership. The other assets were sold for $640,000, resulting in a gain of $140,000. After paying off liabilities of $60,000, the remaining funds were distributed to partners JJ, KK, and LL based on their ownership ratios of 40%, 40%, and 20% respectively.

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    Module 4 Problem 2 PDF

    Uploaded by

    ANDREA PLN
    100 views2 pages
    The partnership is being liquidated and the assets sold. Partner LL received $98,000 in cash for her 20% share of the partnership. The other assets were sold for $640,000, resulting in a gain of $140,000. After paying off liabilities of $60,000, the remaining funds were distributed to partners JJ, KK, and LL based on their ownership ratios of 40%, 40%, and 20% respectively.

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    PARTNERSHIP LIQUIDATION

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    Module_4__Problem_2.pdf

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    The partnership is being liquidated and the assets sold. Partner LL received $98,000 in cash for her 20% share of the partnership. The other assets were sold for $640,000, resulting in a gain of $140,000. After paying off liabilities of $60,000, the remaining funds were distributed to partners JJ, KK, and LL based on their ownership ratios of 40%, 40%, and 20% respectively.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    100 views2 pages

    Module 4 Problem 2 PDF

    Uploaded by

    ANDREA PLN
    The partnership is being liquidated and the assets sold. Partner LL received $98,000 in cash for her 20% share of the partnership. The other assets were sold for $640,000, resulting in a gain of $140,000. After paying off liabilities of $60,000, the remaining funds were distributed to partners JJ, KK, and LL based on their ownership ratios of 40%, 40%, and 20% respectively.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Module 4: Partnership Liquidation – Lump Sum

    Problem 2: (Lump-sum Liquidation)


    Partners JJ, KK and LL have decided to liquidate their partnership. The partnership statement of financial
    position reveals the following:

    Assets Liabilities and Capital


    Cash 50,000 Liabilities 60,000
    Other Assets 500,000 JJ, Capital 180,000
    KK, Capital 240,000
    LL, Capital 70,000
    Total Assets 550,000 Total Liabilities and Capital 550,000

    The partners share profits and losses in a 4:4:2 ratio and all partners are personally solvent. LL received
    P98,000 in cash in full settlement for her share of the partnership.

    Required:
    1. What was the selling price for the other assets?
    2. Prepare a statement of partnership liquidation.

    This study source was downloaded by 100000855831521 from CourseHero.com on 11-21-2022 04:39:06 GMT -06:00

    https://www.coursehero.com/file/91302203/Module-4-Problem-2pdf/
    Answers:
    1. What was the selling price for the other assets?

    JJ KK LL Total
    Balances before liquidation 180,000 240,000 70,000 490,000
    Gain on realization 56,000 56,000 28,000 140,000
    Payment to partners 236,000 296,000 98,000 630,000

    Book Value of Other Assets 500,000


    Gain on realization 140,000
    Selling Price of other assets 640,000

    2. Prepare a statement of partnership liquidation.

    Statement of Liquidation
    Assets Partners' Capital
    LL
    Cash Others Liabilities JJ (40%) KK (40%) (20%)
    Balances before liquidation 50,000 500,000 60,000 180,000 240,000 70,000
    Realization of assets and 640,000 (500,000) 56,000 56,000 28,000
    distribution of loss
    Balances 690,000 - 60,000 236,000 296,000 98,000
    Payment of Liabilities (60,000) (60,000)
    Balances 630,000 - 236,000 296,000 98,000
    Payment to partners (630,000) (236,000) (296,000) (98,000)

    This study source was downloaded by 100000855831521 from CourseHero.com on 11-21-2022 04:39:06 GMT -06:00

    https://www.coursehero.com/file/91302203/Module-4-Problem-2pdf/
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