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  • Cristal Kaye Gallo BSA-1A

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    Cristal Kaye
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    Problem 1 summarizes the dissolution of a partnership. The partnership sold non-cash assets for $200k but had a carrying value of $320k, resulting in a $120k loss. The loss was allocated to the partners based on their capital balances. Partner AA received nothing, BB received $180k, and CC received nothing. The $180k paid to BB came from the $200k in cash proceeds. Problem 2 involves the dissolution of a partnership with outside creditors. $300k was used to pay the 1st priority creditors at 100%. The remaining $80k was used to pay the 2nd priority creditors with 70% going to L and 30% to M. The remaining $70k was

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    Problem 1 summarizes the dissolution of a partnership. The partnership sold non-cash assets for $200k but had a carrying value of $320k, resulting in a $120k loss. The loss was allocated to the partners based on their capital balances. Partner AA received nothing, BB received $180k, and CC received nothing. The $180k paid to BB came from the $200k in cash proceeds. Problem 2 involves the dissolution of a partnership with outside creditors. $300k was used to pay the 1st priority creditors at 100%. The remaining $80k was used to pay the 2nd priority creditors with 70% going to L and 30% to M. The remaining $70k was

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    14 views1 page

    Cristal Kaye Gallo BSA-1A

    Uploaded by

    Cristal Kaye
    Problem 1 summarizes the dissolution of a partnership. The partnership sold non-cash assets for $200k but had a carrying value of $320k, resulting in a $120k loss. The loss was allocated to the partners based on their capital balances. Partner AA received nothing, BB received $180k, and CC received nothing. The $180k paid to BB came from the $200k in cash proceeds. Problem 2 involves the dissolution of a partnership with outside creditors. $300k was used to pay the 1st priority creditors at 100%. The remaining $80k was used to pay the 2nd priority creditors with 70% going to L and 30% to M. The remaining $70k was

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    of 1

    Problem No.

    1
    Net Cash Proceeds P200,000
    Less: Carrying amount of non-cash/other assets -320,000
    (P120,000)

    AA BB CC Totals
    Capital Balances 48,000 216,000 36,000 300,000
    Allocation of Loss:
    [120K x (4/10, 3/10, 3/10)] -48,000 -36,000 -36,000 -120000
    Amounts received by the partners 0 180,000 0 180,000

    CHECKING
    Beginning Balance of Cash P160,000
    Net proceeds from the sale of non-cash/other assets 200,000
    Less: Payment to outside creditors -180,000
    Cash available for distribution to partners P180,000

    Problem No. 2
    Priority Creditors L M N Total
    Available Cash 550,000
    Allocation:
    1st Priority
    (300k x 100%) 300,000 -300,000
    2nd Priority
    [80k x (70% & 30%)] 56,000 24,000 -80,000
    3rd Priority
    [70k x(3/7 & 4/7)] 30,000 400,000 -430,000
    Balance (P260,000)
    Payment after priorities
    [260k x (22%; 34%; & 44%)] -57,200 -88,400 -114,400 (P260,000)
    AMOUNT RECEIVED 300,000 28,800 (64,400) 285,600 0

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