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Accounting 2

Nico, Ricardo, Jack, and Esperanta are business partners who share earnings in a ratio of 3:4:6:7 respectively. They decided to liquidate the business. Their capital account balances totaled P61,000 and the business had non-cash assets of an unknown value and liabilities of P6,900. After converting assets to P25,000 cash and paying liabilities, P23,100 remained to divide among partners.

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Ma. Alexandra Teddy Buen
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72 views1 page

Accounting 2

Nico, Ricardo, Jack, and Esperanta are business partners who share earnings in a ratio of 3:4:6:7 respectively. They decided to liquidate the business. Their capital account balances totaled P61,000 and the business had non-cash assets of an unknown value and liabilities of P6,900. After converting assets to P25,000 cash and paying liabilities, P23,100 remained to divide among partners.

Uploaded by

Ma. Alexandra Teddy Buen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem 1:

Nico, Ricardo, Jack, & Esperanta are partners, sharing earnings in the ratio of 3:4:6:7, respectively. The
balance of their capital accounts on December 31, 2012 are as follows: Jack – P 23,500 ; Nico – P
6,000 ; Esperanta – P 9,250 ; Ricardo - P 22,250. The partners decided to liquidate and they
accordingly convert the noncash assets into P 25,000 cash. After paying the liabilities amounting to P
6,900, they have P 23,100 to divide. Assume that a debit balance in any partner’s capital is
uncollectible.

Determine the following:


1. The book value of the non cash assets.
2. The gain (loss) on realization.
3. The share of Ricardo in the gain (loss) upon conversion of the non cash assets into cash.
4. The amount of cash received by Jack.

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