Reference no: EM132944028
Question - E, J, and N agree to liquidate their consulting practice as soon as possible after the close of business on July 31,2013. The trial balance on that day shows the following account balances.
Cash P130,000 Accounts Payable P60,000
Accounts receivable 120,000 Loan to E40,000
Furniture and Fixtures 350,000 E, capital 200,000
J, capital 150,000
N, capital 150,000
The partners share profits and losses 50%, 20% and 30% to EJ and N, respectively, after N is allowed a monthly salary of P 40,000.
August transactions and events are as follows:
The accounts payable are paid.
Accounts receivable of P 80,000 are collected in full. N accepts accounts receivable with a face value and fair value of P 30,000 in partial satisfaction of his capital balance. The remaining accounts receivable are written off as uncollectible.
Furniture with a book value of P 250,000 is sold for P 150,000.
Furniture with a book value of P 40,000 and an agreed upon fair value of P 10,000 is taken by J in partial settlement of his capital balance. The remaining furniture and fixtures are donated to Goodwill Industries.
Liquidation expenses for P30,000 are paid.
Available cash is distributed to partners on August 31.
Required - How much of J's equity was recovered from the partnership liquidation?
a. P25,000 b. P 94,000 c. P 51,000 d. None
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