Reference no: EM133174374
Question - On Jan. 31, 2019, the partners Valdez, Navarro, and Pamittan authorized the liquidation of their partnership. The statement of financial position is as follows:
Valdez, Navarro and Pamittan Statement of Financial Position January 31, 2019
ASSETS
Cash 10,000
Loan Receivable-Navarro 50,000
Other Assets (net) 240,000
Total Assets 300,000
LIABILITIES and PARTNERS' CAPITAL
Accounts Payable-Trade 90,000
Loan Payable-Valdez 60,000
Valdez, Capital 140,000
Navarro, Capital (70,000)
Pamittan, Capital 80,000
Total Liabilities and Partner's Capital 300,000
Additional Information for 2019:
a. The partner's profit and loss sharing ratio was Valdez 40%; Navarro 40%; and Pamittan 20%
b. On Feb. 1, non-cash assets with a book value of 180,000 realized 140,000, and all available cash was paid to creditors and to partners.
c. On Feb. 4, non-cash assets with a book value of 60,000 realized 50,000, and that amount was paid to partners.
d. On Feb. 5. Navarro who was almost insolvent, paid 30,000 on the loan from the partnership. Valdez and Pamittan agreed that the partnership would receive no more cash from Navarro, and they instructed the accountant to close the partnership's accounting records.
Required -
1. Prepare the cash priority program.
2. Prepare the journal entries.