Partners Ong, Rodriguez, Pamittan and Reyes who share profits and losses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. All partnership assets are to be converted into cash. Before liquidation, the condensed statement of financial position follows: Cash P100, 000 Liabilities P750, 000 Other Assets 1, 800, 000 Rodriguez, Loan 60, 000 Reyes, Loan 50, 000 Ong, Capital 420, 000 Rodriguez, Capital 315, 000 Pamittan, Capital 205, 000 Reyes, Capital 100, 000 Total P1, 900, 000 P1, 900, 000 The non-cash assets realized P800, 000, resulting to a loss of P1, 000, 000. All the partners are solvent, and can contribute any additional cash to cover any deficiency. In the process of liquidation, deficiencies will occur and will require additional investment as follows: a. Pamittan at P7, 500 b. Reyes at P50, 000 c. Reyes and Pamittan for P50, 000 and P7, 500, respectively
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Partners Ong, Rodriguez, Pamittan and Reyes who share profits and
losses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. All
partnership assets are to be converted into cash. Before liquidation, the
condensed statement of financial position follows:
Cash P100, 000 Liabilities P750, 000
Other Assets 1, 800, 000 Rodriguez, Loan 60, 000
Reyes, Loan 50, 000
Ong, Capital 420, 000
Rodriguez, Capital 315, 000
Pamittan, Capital 205, 000
Reyes, Capital 100, 000
Total P1, 900,
000
P1, 900,
000
The non-cash assets realized P800, 000, resulting to a loss of P1, 000,
000. All the partners are solvent, and can contribute any additional cash to
cover any deficiency. In the process of liquidation, deficiencies will occur and
will require additional investment as follows:
a. Pamittan at P7, 500
b. Reyes at P50, 000
c. Reyes and Pamittan for P50, 000 and P7, 500, respectively
d. None
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