Reference no: EM132981108
Question - Please answer, no need for deep explanation
Case 1 - A balance sheet for the partnership of J, Y and P who share profits in the ratio of 50:25:25, shows the following balances just before the liquidation:
Cash P113,000
Other assets 562,275 Liabilities 188,825
J, capital 207,900
Y, capital 146,650
P, capital 132,300
On the first month of liquidation, the following occurs: certain assets with book value of 500,000 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 insure the payment to creditors before making payment to partners. On the first payment to partners, J receives P99,537.5.
1. What is the amount of cash withheld for anticipated liquidation expenses?
2. What is the balance of cash account after the first payment?
3. How much cash were received by Y?
Case 2 - On January 1, 2020, an entity entered into a long-term construction to be completed on June 30, 2020 at an original contract price of P2,400,000. Due to the change in structural design as requested by the customer, the contract price increased by P3,600,000 for the year ended December 31, 2021. The Project was completed on September 30, 2022 which resulted to penalty of P1,200,000 for delayed construction. The following data were provided by the cost accountant of the entity:
Cost incurred during the year 2020 P360,000
2021 P3,384,000
2022 P456,000
Estimated remaining cost to complete at the end of the year
2020 P1,440,000
2021 P2,496,000
2022 --
4. What is the realized gross loss to be recognized by the entity for the year ended Dec. 31, 2022 under cost recovery method?
5. What is the realized gross loss to be recognized by the entity for the year ended Dec. 31, 2021 under percentage of completion method?