Reference no: EM132744451
Installment Liquidation: Cash Priority Programposition of the partnership is as follows:
Pepsi and Coke decided to dissolve and liquidate their partnership on Sept. 23, 2020. On that date, the statement of financial Assets Liabilities & Capital
Cash P 5,000
Other Assets 100,000
Total Assets P 105,000
Accounts Payable P 15,000
Loan Payable - Coke 10,000
Pepsi, Capital 60,000
Coke, Capital 20,000
Total Liabilities & Capital P 105,000
On Sept. 23, 2020, non-cash assets with a carrying amount of P 70,000 realized P60,000, and P64,000 was paid to creditors and partners, P 1,000 being retained to cover possible liquidation costs. On Oct. 1, 2020, the remaining non-cash assets realized P 18,000 (net of liquidation costs), and all available cash was distributed to partners Pepsi and Coke who share profits and losses 40% and 60%, respectively.
Problem 1: How to prepare the cash priority program?
Problem 2: How to prepare the liquidation journal entries and the statement of liquidation?