Reference no: EM132641419
Upon the distribution, the partners agreed to apply bonus to Allen based on the net income before any deductions. However, on January 2,2021, the partners decided to dissolve Beyond the Arc due to disagreements.
The partnership's financial position as of the date is as follows:
Cash P170,000
Receivables 1,000,000
Inventories 700,000
Building 780,000
Total Assets P2,650,000
Payables P850,000
Curry, Capital 690,000
Payton, Capital 720,000
Allen, Capital 690,000
Total Liabilities and Capital P2,950,000
The assets were realized, and liquidation expenses were paid as follows:
January 14 Inventory P 400,000
Liquidation expense (45,000)
February 20 Receivables realized 400,000
Liquidation expense (30,000)
March 17 Building 810,000
Liquidation expence (9,000)
Before liquidating, the partners also decided that:
- Creditors will be paid as follows: P150,000 on January 18, P500,000 on February 27 and the balance on March 22.
- Cash should be withheld for possible future liquidation expenses in the amount of P60,000 in January and P9,000 in February
- As soon as cash is available, this should be immediately be distributed to the partners to the extent possible
Problem 1: How much was the cash available for distribution at the end of January?
Option 1: (P385,000)
Option 2: P365,000
Option 3: Nil
Option 4: P305,000
Problem 2: How much was the cash available for distribution at the end of March?
Option 1: P510,000
Option 2: P1,019,000
Option 3: P 819,000
Option 4: P810,000
Problem 3: What was the final distribution to Curry in March?
Option 1: P270,000
Option 2: P227,667
Option 3: P170,000
Option 4: P183,667
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