Reference no: EM132787228
Question 1 - Kevin, a partner in a law firm, decided to withdraw from the partnership. Kevin's share in the partnership profits and losses was 20%. Upon withdrawal from the partnership he was paid cash in final settlement for his interest. The total of the partners' capital account before the recognition of the revaluation prior to Kevin's withdrawal was P315,000. After his withdrawal the remaining partners' capital accounts, excluding their share of revaluation, totaled P246,000, but including their share of revaluation, totaled P384,000.
Required - What is the total amount of cash paid to Kevin?
Question 2 - A balance sheet for the partnership of Mavi, Cong and Viy, who share profits in the ratio of 50:25:25, shows the following balance just before liquidation:
Cash P113,400 Mavi, capital (50%) P207,900
Other assets 562,275 Cong, capital (25%) 146,650
Liabilities 188,825 Viy, capital (25%) 132,300
On the first month of liquidation, the following occurs:
Certain assets with book value of P500,000 were sold for P375,000.
Liquidation expenses of P9,450 are paid and additional liquidation expenses are anticipated.
Liabilities are paid amounting to P51,500 and sufficient cash is retained to ensure the payment to creditors before making payments to partners.
On the first payment to partners, Mavi receives P99,537.50.
Required -
1. What is the amount of cash withheld for anticipated liquidation expenses?
2. How much cash were received by Cong?
3. What is the balance of cash account after the first payment?