Answered: DD, EP. and FF decided to dissolve the…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 4CE

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DD, EP. and FF decided to dissolve the partnership on July 31, 2021. Their capital balances and profit ratio on this date follow: DD, 33,600 (45%); EE, 43,200 (25%.); FF, 19,200 (30%), The net income from January 1 to luly 31, 2021 was P7,200. Also, on this date cash and liabilities were 25,200 and 34,800 respectively. FF received 24,960 In full settlement of his interest.

12. Which of the following statements is true?

a. 115,200 was realized from sale of NCA

b. DD recieved 42,240 in full settlement of his interest.

c. 124,800 was the total distribution to outsiders and the partners.

d. EE's share in the loss on realization was 3,000.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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