Reference no: EM132699506
Question 1 - Partners Alipio, Borromeo and Castro share profits and losses in the ratio of 5:3:2. At the end of a very unprofitable year, they decided to liquidate the firm. The partner's capital account balances at this time are as follows: Alipio, P55,000; Boromeo, P62,250; Castro, P37,500.
The liabilities accumulate to P75,000, including a loan of P25,000 from Alipio. The cash balance is P15,000. All the partners are personally solvent. The partners plan to sell the assets in installment. If Alipio received a total of P50,000 as a result of liquidation, what was the total amount realized from the sale of the non-cash assets?
A. P154,750
B. P184,750
C. P214,750
D. P60,000
If Castro received P15,500 on the first installment of cash, how much did Borromeo received at that time?
A. P25,000
B. P12,500
C. P29,250
D. P15,500
Question 2 - The following information is found in the books of the partnership of Rommel, Stephanie and Tina on December 31, 2018:
|
Cash
|
P50,000
|
|
Accounts receivable, net
|
100,000
|
|
Noncash assets
|
800,000
|
|
Loan to Rommel
|
50,000
|
|
Expenses
|
400,000
|
|
Accounts payable
|
80,000
|
|
Loan from Tina
|
20,000
|
|
Revenues
|
200,000
|
|
Rommel, capital
|
300,000
|
|
Stephanie, capital
|
450,000
|
|
Tina, capital
|
350,000
|
Additional information:
Partnership profits are divided 20%, 40% and 40% respectively to Rommel, Stephanie and Tina. Salary allowances of P25,000 each are also given to Rommel and Stephanie.
Due to the disastrous results of 2018, the partners agreed to liquidate the business as soon as possible after January 1, 2019 and to distribute available cash on a weekly basis.
During the first week in January, P85,500 was collected on the accounts receivable and cash was distributed on January 9, 2019.
1. How much is the loss absorption balance of Rommel?
A. P1,500,000
B. P1,250,000
C. 1,125,000
D. 1,050,000
2. How much is the share of Rommel on the January 9, 2019 cash distribution?
A. P43,500
B. P12,000
C. P35,167
D. 20,333