True or False pg.

4: 30-31
1 1. The creditors of the partnership shall have priority in payments over those of the partners' separate c
1 2. The loss absorption balances represent themaximum loss that the partners could absorb without redu
0 3. Gains andlosses on the sale of assets in liquidation are divided equally among partners.
1 4. A partnership may be dissolved without being liquidated but liquidation is always preceded by dissolu
1 5. A partner's inability to meet his obligations at the time of liquidation relieves that individual of his liab
0 6. A partner's unrestricted interest represents theportion of a partner's interest which should remain av
1 7. In partnership liquidation, one partner may have to make up for the deficit in another partner's accou
0 8. When a partnership goes out of business, all the remaining non-cash assets will be declared as a tota
1 9. Liquidation of apartnership is the winding upof its business activities characterized by sale of all non-c
1 10. Partnership creditors shall have priority in payments than those of the partners' separate creditors a
1 11. When cash is insufficient to fully satisfy the cash requirements in a particular priority, then the availa
0 12. The entry to record the exercise of offset will debit the partner's loan account and credit cash.
1 13. A partnership is said to be dissolved when the business is terminated.
1 14. Under the installment method of partnership liquidation, realization of non-cash assets is accomplish
Any excess may be distributed to the partners in accordance with a program of safe payments or a cash
1 15. Restricted interests are provided for assumed non-sale of remaining non-cash assets and for assume
0 16. The creditors of each partner shall be preferred to those of the partnership as regards thepartnershi
1 17. Liquidation of a partnership is the process of ending the business.
0 18. The cash settlement of all liabilities is reffered to as realization.
0 19. In liquidation, partners are given back the assets that they originally invested.
0 20. Cash payments may be made in theprofit and loss ratio only when installment payments have cause
1 21. Partnershipcreditors will be prioritized next to the inside creditors as to partnership assets in case of
0 22. A partner's interest can be obtained by simply adding the partner's capital account, loans to and from
0 23. In liquidation of a partnership results in a negative balance in a partner's account, the partner must p
0 24. The use of safe payments schedule and cash priority program are alternatives which willyield the sam
0 25. Partnership liquidation is the same as partnership dissolution.
1 26. The creditors of the partnership are preferred with respect to the separate or personal properties of
1 27. The right of offset is the legal right of a partner toapply part or all of his loan account balance agains
 yments over those of the partners' separate creditors as regards the partnership properties.
s that the partners could absorb without reducing their equity below zero.
vided equally among partners.
but liquidation is always preceded by dissolution.
f liquidation relieves that individual of his liabilities to the other partners.
f a partner's interest which should remain available to absorb possible future losses.
e up for the deficit in another partner's account.
ing non-cash assets will be declared as a totalloss. This loss onliquidation shall be divided among the partners in their profit and
ess activities characterized by sale of all non-cash assets, settlement of all liabilities and distribution of the remaining cash to th
an those of the partners' separate creditors as regards the separateproperties of the partners.
ements in a particular priority, then the available cash will be distributed using theprofit and loss ratio.
partner's loan account and credit cash.
is terminated.
n, realization of non-cash assets is accomplished over an extended period of time . When cash is available, creditors may be pa
ce with a program of safe payments or a cash priority program. This process persists until all the non-cash assets are sold.
of remaining non-cash assets and for assumed insolvency of deficient partners.
e of the partnership as regards thepartnership property.
e business.

hey originally invested.

only when installment payments have caused the ratioof the partners' capital account balances to be the same as the profit an
e creditors as to partnership assets in case of liquidation.
he partner's capital account, loans to and from the partnership.
nce in a partner's account, the partner must pay into the partnership the amount of the negative balance.
ogram are alternatives which willyield the same ultimate cash distributions to the partners.

pect to the separate or personal properties of thepartners.

part or all of his loan account balance against a capital deficiency resulting from losses in the realization of the partnership ass
ong the partners in their profit and loss ratio.
bution of the remaining cash to thepartners.

h is available, creditors may be partially or fully paid.

he non-cash assets are sold.

ces to be the same as the profit andloss ratio.

tive balance.

realization of the partnership assets.

Multiple Choice (4-32 - 4-34)
1. If a partner is insolvent, his personal properties shall first be distributed
a) to partnership creditors
b) to the partners by way of additional contributions when the assets of the pa
c) to partnership and separate creditors in the ratio of their loan exposures.
d) to separate creditors.

2. In partnership liquidation, the assets of the partnerships shall be applied lastly to

a) those owing to outside creditors,
b) those owing to the partners with respect to their share of the profits.
c) those owing to the partners with respect to their capital contributions,
d) those owing to inside creditors in the form of loans or advances for busines

3. Which of the following statements is correct regarding a partner's capital deficiency?

a) Partners who absorb another's capital deficiency have a legal claim against
b) The partner should contribute to reduce the debit balance to the extent po
c) If contributions are not possible, the other partners with credit capital balan
d) Allof these statements are correct.

4. The following is the priority sequence in which liquidation proceeds will be distributed for a partnership
a) Partnership liabilities, partnership loans and partnership capital balances.
b) Partnership drawings, partnershipliabilities, partnership loans and partners
c) Partnership liabilities, partnership loans, partnership drawings and partners
d) Partnership liabilities, partnership capital balances and partnership loans.

5. Claims against partners' personal assets by creditors if the partnership can't pay its debts refers to
a) liquidation.
b) dissolution.
c) mutual agency.
d) unlimited liability

6. A liquidation differs from a dissolution in that in a liquidation

a) assets may be revalued.
b) the business will not continue.
c) there may be an adjustment of partners' capital accounts.
d) gains andlosses are distributed according to the partnership agreement.

7. A partner's loss absorption balance is calculated by

a) dividing the partner's capital balance by his percentage interest capital.
b) multiplying distributable assets by the partner's profit sharing percentage.
c) dividing the partner's total interests by his profit and loss sharing percentag
d) multiplying the partner's total interests by his profit and loss sharing percen

8. In accounting for liquidation of a partnership, cash payments to a partners after all outside creditors' cla
a) relative profit and loss sharing ratios.
 b) safe payments computations.
c) the final balances inpartners' capital accounts.
d) the relative share of gain orloss on liquidation.

9. Which of the following isnot correct with respect to an installment liquidation of a partnership?
a) All remaining liquidation expenses are anticipated.
b) All non-cash assets are assumed to be worthless.
c) Distributions to partners are always made according to their profit sharing p
d) Partners with the greatest ability to absorb losses and expenses are the firs

10. In a partnership liquidation, the finalcash distribution to the partners should be made in accordance w
a) safe payments computations.
b) partners' profit and loss sharing ratios.
c) balances of partners' capital accounts
d) ratio of the capital contributions by partners.

11. In liquidation, the liabilities of the partnership should be paid.

a) before any sales of assets.
b) before the distribution of cash to partners.
c) before the distribution of gains and losses on the disposal of assets.
d) after a revaluation of assets.

Multiple Choice (4-47)

Partners Baldecir and Magallanes each have aP300,000 capital balance and share profits and losses in a 3:
Cash equals P100,000, non-cash assets equal P1,000,000, and liabilities equal P500,000.

1. If the non-cash assets are sold for P600,000, then Magallanes' capital account will
a) decrease by P100,000
b) decrease by P 200,000
c) decrease by P300,000
d) increase by P150,000

2. If the non-cash assets are sold for P400,000, and both partners agreed tomake up for any capital deficit
a) P0
b) P100,000
c) P150,000
d) P200,000

3) If the non-cash assets are sold for P500,000 and each partner is personally insolvent, Magallanes eventu
a) P0
b) P100,000
c) P125,000
 d) P175,000

Multiple Choice (4-48)

Partners Biore and Selisana each have a P450,000 capital balance and share profits and losses in a 3:2 ratio
non-cash assets equal P1,500,000, and liabilities equal P750,00.

1.If the non-cash assets are sold for P1,000,000, the charge in Selisana’s capital account will be
a. an increase of 500,000.
b. a decrease of P250,000
c. a decrease of P200,000
d. an increase of P400,000

Solution:
1,500,000 - 1,000,000 = 500,000
500,000 x 2/5 = 200,000

2. If the non-cash assets are sold for P700,000 and each partner is personally insolvent, upon liquidation S
a. P100,000
b. P50,000
c. P130,000
d. P0

P/L Ratio 3
Cash Non-cash Assets Liabilities Biore,Capital
Balances Before Liquidation P150,000 P1,500,000 P750,000 P450,000
Sale of Assets and Distribution
of Losses 700,000 (1,500,000) (480,000)
Balances P850,000 P750,000 (30,000)
Payment to liabilities to outsi (750,000) (750,000)
Balances P100,000 (30,000)
Additional Losses to Selisana 30,000
Balances P100,000
Payment to Partners (100,000)

3. If the non-cash assets are sold for P700,000 and both partners agree to make up for any capital deficits
liquidation Selisana will receive cash distribution of
a. P100,000
b. P50,000
c. P130,000
d. P0
 Cash Non-cash Assets Liabilities
Balances Befor P150,000 P1,500,000 P750,000
Sale of Assets and Distribution
of Losses 700,000 (1,500,000)
Balances P850,000 P750,000
Payment to liab (750,000) (750,000)
Balances P100,000
Additional Inv 30,000
Balances P130,000
Payment to Par (130,000)

Multiple Choice (4-49 - 4-53)

1. Mactal, Macadang and Pangan are partners with capital balances of P350,000, P250,000 and P350,000
Partners agreed to dissolve the business and upon liquidation, all of the partnershipassets are sold and
for P50,000. Pangan is personally insolvent, but the other two partners are able to meet any indebtedn
Mactal is to absorb:
a) P15,000
b) P30,000
c) P25,000
d) P40,000

2. Partner's Ong, Rodriguez, Pamittan and Reyes who share profits and losses at 30%, 30%, 20% and 20% r
Before liquidation, the condensed statement of financial position follows.

Cash P 100,000 Liabilities P 750,000

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
P 1,900,000 P 1,900,000

The non-cash assets realized P800,000, resulting to a loss of P 1,000,000. All the partners are solvent, and
In the process of liquidation, deficiencies will occur and will require additional investment as follows:
a) Reyes and Pamittan for P50,000 and P 7,500, respectively
b) Reyes at P50,000
c) Pamittan at P 7,500
d) None
3. As of Dec. 31,2019, the books of AEZ Partnership showed capital balances of Amurao, P 40,000;Estoqoe
respectively. The partners decided toliquidate and they sold all non-cash assets for P 37,000. After settle
left for distribution. Assuming that any capital deficiency is uncollectible, the share of Amurao in the dist
a) P 17,000
b) P 17,800
c) P 18,000
d) P 19,000

4. Ramos, Seechua and Tria are partners in a textile distribution business, sharing profits and losses equall
partners' drawing were as follows:

Ramos Seechua Tria Total

Capital P100,000 P80,000 P 300,000 P 480,000
Drawing 60,000 40,000 20,000 120,000

The partnership was unable tocollect on its trade receivables, and it was forced toliquidate. The operati
partnership assets. Unsettled creditors' claim at dec. 31, 2019 amounted to P84,000. Seechua and Tria
The final cash distribution to Tria was:
a) P 162,000
b) P 108,000
c) P 84,000
d) P 78,000

5. After operating for five years, the books of the partnership of Lopez and Mendez showed the following

Net Assets P 130,000

Lopez, Capital 85,000
Mendez, Capital 45,000

If liquidation takes place at this point and the net assets are realized at book value the partners are entit
a) Lopez to receive P97,500 and Mendez to receive P32,500
b) Lopez to receive P90,000 and Mendez to receive P40,000
c) Lopez to receive P85,000 and Mendez to receive P45,000
d) Lopez to receive P65,000 and Mendez to receive P65,000

6. Garachico, Dugan, Pascua and Cerda are partners, sharing profits in the ratio of 3/21, 4/21, 6/21 and 8/
are as follows:
Garachico P 1,000
Dugan 25,000
Pascua 25,000
Cerda 9,000
P 60,000
 The Partners decided to liquidate, and they accordingly converted the non-cash assets into P 23,200 of c
Assume that a debit balance of any partner's capital is uncollectible. The share of Garachico in the loss o
a) P 4,972
b) P 5,200
c) P 5,257 P 5, 428.57
d) P 5,400

7. Matias, Pagayanon and Pescasiosa, partners sharing profits and losses based on 4:4:2 decided to liquida
financial position just prior to liquidation follows:

Assets Liabilities and Capital

Cash P 100,000 Liabilities P140,000
Other Assets 400,000 Matias, Loa 10,000
Matias, Cap 45,000
Pugayanon 105,000
Pecasiosa, 200,000
Total P 500,000 Total P 500,000

Other assets were sold for P 247,500 realizing a loss of P 152,500. Parties agreed to fully terminate the pa
to partners and in case of capital deficiency, contribution of additional cash. The three partners were all so

Name of the partner and give the corresponding additional cash he had to invest due to his net capital defi
partnership.
a) Matias, P 6,000
b) Matias, P 16,000
c) Pescasiosa, P 30,500
d) Pagayanon, P 44,000

8. Partners Gumban, Danlag and Escriba whoshared profit and losses based on 4:4:2 ratio decided to liquid
of financial position just prior to liquidation follows:

Cash p 100,000 Liabilities P 140,000

Other Assets 400,000 Gumban, Loan 10,000
Gumban, Capital 45,000
Danlag, Capital 105,000
Escriba, Capital 200,000
Total P 500,000 Total P 500,000

Other assets were sold for P 247,500 realizing a loss of P152,500. Parties agreed to fully terminate the par
the event of capital deficiency, contribution of additional cash. The three partners were all solvent and co
loss and payment of liabilities resulted to the realization of assets, distribution of loss and payment of liab
prior to final cash settlement.
 Gumban, Loan Gumban, Capital Danlag, Capital Escriba, Capital
a) P10,000 P 10,000 P 50,000 P 165,000
b) 10,000 15,000 55,000 165,000
c) 10,000 -16,000 44,000 160,500
d) 10,000 45,000 105,000 200,000

On May 1, 2019, the business assets of Jerusalem and Rebusora follow:

Jerusalem Rebusora
Cash P 11,000 P 22,354
Accounts Receivable 234,536 567,890
Inventories 120,035 260,102
Land 603,000
Building 428,267
Furniture and Fixtures 50,345 34,789
Other Assets 2,000 3,600
Total P 1,020,916 P 1,317,002

Accounts Payable P 178,940 P 243,650

Notes Payable 200,000 345,000
Jerusalem, Capital 641,976
Rebusora, Capital 728,352
Total P 1,020,916 P 1,317,002

Jerusalem and Rebusora agreed to form a partnership contributing their respective assets equities subject
* Accounts receivable of P 20,000 in Jerusalem's books and P 35,000 in Rebusora's are uncollectible
* Inventories of P 5,500 and P 6,700 are worthless in Jerusalem's and Rebusora's respective books.
* Other assets of P 2,000 and P 3,600 in Jerusalem's and Rebusora's respective books are to be written off

9. The capital accounts of the partners after the adjustments will be:
a) Jerusalem's, P 615,942; Rebusora's, P 717,894
b) Jerusalem's, P 640,876; Rebusora's, P 717,345
c) Jerusalem's, P 613,576; Rebusora's, P 683,350
d) Jerusalem's, P614,476; Rebusora's, P 683,052

10. How much assets doees the partnership have?

a) P 2,365,218
b) P 2,337,918
c) P 2,265,118
d) P 2,237,918
 11. Lazerna offered to join for a 20% interest in the firm. How much cash should he contribute?
a) P 344,237
b) P 337,487
c) P 330,870
d) P 324,382

12. After Lazerna's admission, the profit andloss sharing ratio was agreed to be 40:40:20 based on capital
between Jerusalem and Rebusora?
a) P 34,288
b) P 33,602
c) P32,272
d) P32,272

13. During the first year of operations, the partnership earned P325,000. Profits were distributed in the ag
Jerusalem, P50,000; Rebusora, P 65,000; Lazerna, P28,000. How much are the capital balances after the fi
a) Jerusalem, P 728,764; Rebusora, P 713,764; Lazerna, P 361,382
b) Jerusalem, P 743,121; Rebusora, P 727,825; Lazerna, P 368,501
c) Jerusalem, P 750,627; Rebusora, P 735,177; Lazerna, P 372,223
d) Jerusalem, P 757,915; Rebusora, P742,315; Lazerna, P375,837

Multiple Choice (4-62 - 4-64)

1. After all non-cash assets have been converted into cash in the liquidation of the Pozon and Ronzales pa

Debit Credit
Cash P47,000
Accounts Payable P 32,000
Loan Payable to Pozon 15,000
Pozon, Capital 7,000
Ronzales, Capital 7,000

Available cash should be distributed with P 32,000 going to accounts payable and
a) P 7,000 to Pozon and P 8,000 to Ronzales.
b) P 7,500 each to Pozon and Ronzales.
c) P 8,000 to Pozon and P 7,000 to Ronzales.
d) P 15,000 to the loan payable to Pozon.

2. The condensed statement of financial position is presented for Borromeo, Corpuz, and Dedumo, who sh
in the ratio of 4:4:3, respectively:

Assets Liabilities and Capital

Cash P100,000 Liabilities P 150,000
Other Assets 300,000 Borromeo, Capital 40,000
Corpuz, Capital 180,000
Dedumo, Capital 30,000
Total P400,000 Total P 400,000

The partners agreed to dissolve the partnership afetr selling the other assets for P200,000. Upon dissoluti
a) P0
b) P 40,000
c) P 60,000
d) P 70,000

3. In a partnership liquidation, the final cash distribution to the partners should be made in accordance wi
a) ratio of the capital contributions by the partners.
b) ratio of capital contributons less withdrawals by the partners.
c) partners' profit and loss sharing ratio.
d) balances of the partners' loan and capital accounts.

4. On Jan. 1, 2019, the partners of Leung, Ricablanca, and Edulan, who share profits and losses in the ratio
On this date the partnership condensed statement of financial position was as follows:

Assets Liabilities and Capital

Cash P 50,000 Liabilities P 60,000
Other Assets 250,000 Leung, Capital 80,000
Ricablanca, Capital 90,000
Edulan, Capital 70,000
Total P 300,000 Total P 300,000

On Jan. 15, 2019, the first cash sale of other assets with a carrying amount of P 150,000 realized P 120,00
How much cash should be distributed to each partner?

Leung Ricablanca Edulan

a) P 15,000 P 51,000 P 44,000
b) P 40,000 P 45,000 P 35,000
c) P 55,000 P 33,000 P 22,000
d) P 60,000 P 36,000 P 24,000

Partners Saliut, Villon and Isagan share of profits and losses in the ratio of 4:5:1. The statement of financia

Cash P 50,000 Accounts Payable P 150,000

Inventory 360,000 Saliut, Capital 160,000
Villon, Capital 45,000
 Isagan, Capital 55,000
Total Assets P 410,000 Total Liabilities an P 410,000

5. If the inventory is sold for P 300,000, how much should Saliut receive upon liquidation of the partnershi
a) P 160,000
b) P 136,000
c) P 100,000
d) P 48,000

6. If the inventory is sold for P 180,000, how much should Isagan receive upon liquidation of the partnersh
a) P 28,000
b) P 32,000
c) P 37,000
d) P 55,000

7. The partnership will be liquidated in installments. As cash becomes available, it will be distributed to th
how much cash should be distributed to each partner at this time?

Saliut Villon Isagan

a) P 56,000 P 70,000 P 14,000
b) P 16,000 P 20,000 P 4,000
c) P 32,000 P0 P 8,000
d) P 20,000 P0 P 20,000

8. In accounting for the liquidation of a partnership, cash payments to partners after allnon-partner credit
a) safe payments computations
b) the final balances in partner capital accounts.
c) the partners' relative profit and loss sharing ratios.
d) the partners' relative share of the gain or loss on liquidations.

Multiple Choice (4-65 - 4-68)

1. The condensed statement of financial position of Ricablanca, Tac-an and Dimalanta partnership as of M

Assets
Cash P 28,001
Non-Cash Assets 265,000
Total P 293,000

Liabilities P 48,0000
Ricablanca, Capital 95,000
Tac-an, Capital 80,000
Dimalanta, Capital 70,000
Total P 293,000

Profit and loss ratio is 50:25:25, respectively. The partners voted todissolve the partnership and liquidate
non-cash assets which has a book value of P 150,000. After settlement with creditors, all cash available wa
a) P 10,500
b) P20,000
c) P 32,500
d) P 21,250

2. The statement of financial position of the partnership of Balino, Andres and Ignacio who share in the pr

Assets Liabilities and Capital

Cash P 30,000 Liabilities P 50,000
Other Assets 320,000 Balino, Capital 80,000
Andres, Capital 115,000
Ignacio, Capital 105,000
Total P 350,000 Total P 350,000

The partnership agreed to liquidate the partnership by installment. Immediately there was a realization of
available, priority is the payment of the liabilities and the balaance is to be distributed to the partners. Ho
a) Balino, P 50,000; Andres, P 30,000; Ignacio, P 20,000
b) Balino, P 40,000; Andres, P 24,000; Ignacio P 16,000
c) Balino, P 0; Andres, P 48,000; Ignacio, P 32,000
d) Balino, P 0; Andres, P 31,000; Ignacio P 49,000

3. Rueda, Castro and Pural have capital balances of P 40,000, P 50,000 and P 18,000, respectively and a pr
the total amount received by all the partners was:
a) P 108,000
b) P 56,000
c) P 24,000
d) P 52,000

4. Assume the same facts in No. 3 aboveexcept that Rueda received P 26,000 as a result of the liquidation
a) P 26,000
b) P 18,000
c) P 14,500
d) P 14,000

5. The partnership of Rivera, Colorado and Reyes share profits and losses in the ratio of 5:3:2, respectively

Assets Liabilities and Capital

Cash P 40,000 Liabilities P 60,000
Other Assets 210,000 Rivera, Capital 48,000
Colorado, Capital 72,000
Reyes, Capital 70,000
Total P 250,000 Total P 250,000

The partnership will be liquidated over a prolonged period of time. As cash is available it will be distribute
realized P 90,000. How much cash should be distributed to each partner after this sale?
a) Rivera, P 0; Colorado, P 28,800; Reyes, P 41,200
b) Rivera, P 0; Colorado, P 30,000; Reyes, P 40,000
c) Rivera, P 35,000; Colorado, P 21,000; Reyes P 14,000
d) Rivera, P 45,000; Colorado, P 27,000; Reyes P 18,000

Corleto, Samonte and Bibonia are partners sharing profits and losses in the ratio of 4:3:3, respectively. The

Cash P 50,000 Liabilities P 40,000

Other Assets 130,000 Corleto, Capital 60,000
Samonte, Capital 40,000
Bibonia, Capital 40,000
Total P 180,000 Total P 180,000

6. The CSB Partnership was dissolved and liquidated by installments. The first realization of P 40,000 cash
the liabilities, the cash available is distributed to Corleto, Samonte and Bibonia, respectively as follows:
a) P 36,000; P 27,000; P 27,000
b) P 16,000; P 12,000; P 12,000
c) P 44,000; P 28,000; P 28,000
d) P 24,000; P 13,000; P 13,000

The following statement of financial position is presented for the partnershipof Villanueva, Pozon and Yec

Assets Liabilities and Capital

Cash P 120,000 Liabilities P 280,000
Other Assets 1,080,000 Villanueva, Capital 560,000
Pozon, Capital 320,000
Yecyec, Capital 40,000
Total P 1,200,000 Total P 1,200,000

7. Assume that the partners decided to liquidate the partnership. If the other assets were sold for P 800,0
Villanueva Pozon Yecyec
a) P 280,000 P 320,000 P 40,000
b) P 324,000 P 236,000 P16,000
c) P 412,000 P 228,000
d) P 410,000 P 230,000
As of Dec. 31, 2019, the books of Vicente, Garcia & Cabuyadao Partnership showed capital balances of Vic
ratio was 3:2:1, respectively. The partners decided to dissolve and liquidate. They sold all non-cash assets
have P 28,000 cash left for distribution.

8. The loss on realization of the non-cash assets was:

a) P 42,000
b) P 40,000
c) P 45,000
d) P 21,000

9. Assuming that any debit balance of partners' capital is uncollectible, the share of Vicente on P 28,000 ca
a) P 19,000
b) P16,000
c) P 18,000
d) P 17,800

From the records of the DTA Partnership, answer the nos. 10-12:

DTA Partnership
Statement of Financial Position
Dec. 31, 2019

Assets
Cash P 2,000
Other non-cash assets 28,000
Total P 30,000

Liabilities and Capital

Liabilities P 5,000
De Mesa, Loan 2,500
De Mesa, Capital 12,500
Tudtud, Capital 7,000
Apostol, Capital 3,000
Total P 30,000

Profit and loss ratio is 3:2:1 for De Mesa, Tudtud and Apostol, respectively. Cash is distributed as assets ar

Date Cash Received Book Value

Monday, January 1, 2018 P 6,000 P 9,000
Friday, February 1, 2019 3,500 7,700
Friday, March 1, 2019 12,500 11,300
10. The total loss to De Mesa is:
a) P 3,000
b) P 2,000
c) P 1,000
d) P 0

11. Total cash received by Tudtud is:

a) P 2,000
b) P 1,500
c) P 5,000
d) P 0

12. Cash received by Apostol in January is:

a) P 200
b) P 1,000
c) P 0
d) P 500
 when the assets of the partnership were insufficient to settle all obligations.
of their loan exposures.

hare of the profits.

apital contributions,
s or advances for business expenses by the partners,

ave a legal claim against the deficient partner.

balance to the extent possible.
s with credit capital balance will be allocated a portion of the debit balance.

tributed for a partnership:

ership capital balances.
ership loans and partnership capital balances.
ip drawings and partnership capital balances.
and partnership loans.

y its debts refers to

artnership agreement.

ntage interest capital.

ofit sharing percentage.
nd loss sharing percentage.
fit and loss sharing percentage.

er all outside creditors' claims have been satisfied, but before final cash distribution, should be according to
of a partnership?

ng to their profit sharing percentages.

and expenses are the first to receive installment distributions.

be made in accordance with the.

disposal of assets.

profits and losses in a 3:1 ratio, respectively.

up for any capital deficits with personal cash contributions, Magallanes eventuallly will receive cash of

olvent, Magallanes eventually will receive cash of

ts and losses in a 3:2 ratio, respectively. Cash equals P150,000,

ccount will be

olvent, upon liquidation Selisana will receive a cash distribution of

:2
Selisana, Capital
P450,000

(320,000)
130,000

130,000
(30,000)
P100,000
(100,000)

up for any capital deficits with personal cash distributions, upon

P/L Ratio 3 :2
 Biore,Capital
Selisana, Capital
P450,000 P450,000

(480,000) (320,000)
(30,000) 130,000

(30,000) 130,000
30,000
P130,000
(130,000)

P250,000 and P350,000 and sharing profits 30%, 20% and 50%, respectively.
ershipassets are sold andsufficient cash is realized to pay all the claims except one
e to meet any indebtedness to the firm. On the remaining claim against the partnership,

30%, 30%, 20% and 20% respectively, decided to liquidate. All partnership assets are to be converted into cash.

partners are solvent, and can contribute any additional cash to cover any deficiency.
vestment as follows:
murao, P 40,000;Estoqoe, P 25,000; Zulueta, P 5,000. The partners' profit and loss ratio was 3:2:1,
s for P 37,000. After settlement of all liabilities amounting to P 12,000, they still have cash of P 28,000
are of Amurao in the distribution of cash would be:

profits and losses equally. On Dec. 31, 2018, the partnership capital and the

d toliquidate. The operating profits for 2018 amounted to P 72,000, and was as exhausted including the
4,000. Seechua and Tria have substantial private resources, but Ramos has no available free assets.

ez showed the following balances:

lue the partners are entitled to:

f 3/21, 4/21, 6/21 and 8/21, respectively. The balances of their capital accounts on Dec. 31,2019
h assets into P 23,200 of cash. After paying theliabilities amounting to P3,000, they have P22,000 to divide.
of Garachico in the loss on realization was:

n 4:4:2 decided to liquidate. All assets of the partnership were liquidated. The condensed statement of

to fully terminate the partnership's business thus, necessitating distribution of cash

three partners were all solvent and could answer any capital deficiency.

due to his net capital deficiency to finally settle the liquidation of the

4:2 ratio decided to liquidate. All assets of the partnership were liquidated. The condensed statement

to fully terminate the partnership's business thus, necessitating distribution of cash to partners and in
s were all solvent and could answer any capital deficiency. The realization of assets, distribution of
loss and payment of liabilities resulted to the following partner's loan and capital accounts balances
ve assets equities subject to the following adjustments:
's are uncollectible
respective books.
ooks are to be written off.
he contribute?

0:40:20 based on capital credits. How much should the cash settlement be

were distributed in the agreed manner. Drawings were made in these amounts:
pital balances after the first year?

e Pozon and Ronzales partnership, the ledger contains the following account balances:

puz, and Dedumo, who share profits and losses

P200,000. Upon dissolution of the partnership, Borromeo should have received

e made in accordance with the

fits and losses in the ratio of 5:3:2, respectively, decided to liquidate their partnership.

50,000 realized P 120,000. Safe installment payments to the partners were made same date.

The statement of financial position for the partnership is as follows:

uidation of the partnership?

uidation of the partnership?

t will be distributed to the partners. If inventory costing P 200,000 is sold for P 140,000

fter allnon-partner creditors' have been satisfied, but before the final cash distribution, should be according to

anta partnership as of March 31, 2019 follows:

artnership and liquidate by selling assets in installments. P 70,000 was realized on the first cash sale of other
tors, all cash available was distributed to partners. How much cash did Dimalanta receive?

nacio who share in the profits and losses in the ratio of 5:3:2, respectively, is as follows:

there was a realization of P 100,000 cash in selling other assets with book value of P 150,000. On the cash
buted to the partners. How should the remaining cash be distributed?

00, respectively and a profit sharing ratioof 4:2:1, respectively. If Rueda received P 8,000 upon liquidation,

a result of the liquidation, Pural received as part of the liquidation.

atio of 5:3:2, respectively. The partners voted to dissolve the partnership when its assets, liabilities and capital were as follows:
ilable it will be distributed to the partners. The first sale of non-cash assets having a book value of P 120,000

of 4:3:3, respectively. The condensed statement of financial position of CSB Partnership as of Dec. 1, 2019 is:

lization of P 40,000 cash was on the sale of other assets with book valuee of P 80,000. After the payment of
espectively as follows:

illanueva, Pozon and Yecyec who share profits and losses in the ratio of 5:3:2, respectively.

ets were sold for P 800,000, how should the available cash be distributed?
ed capital balances of Vicente, P 40,000; Garcia, P 25,000 and Cabuyadao, P 5,000. The partners' profit and loss
y sold all non-cash assets for P 37,000 cash. After settlement of all liabilities amounting to P 12,000, they still

of Vicente on P 28,000 cash for distribution was:

s distributed as assets are realized. Other assets were realized as follows:

erted into cash.
be according to
sale of other

n the cash

iquidation,

ties and capital were as follows:

of P 120,000

ec. 1, 2019 is:

payment of
' profit and loss
00, they still
Problem # 1 Lump-Sum Liquidation with Gain on Realization
After several years of operations, the partnership of Arenas, Dulay, and Laurente is to be liquidated.
After making the closing entries on June 30, 2019, the following accounts remained open:

Account Balance
Account Tile Debit Credit
Cash 50,000
Non-Cash Assets 2,350,000
Liabilities 400,000
Arenas, Capital 900,000
Dulay, Capital 500,000
Laurente, Capital 600,000

The non-cash assets are sold for P2,650,000. Profits and losses are shared equally.
Required:
Prepare a statement of partnership liquidation and the entries to record the following:
1. Sale of non cash assets
2. Distribution of Gain on Realization
3. Payment of Liabilities
4. Distribution of cash to the partners

Arenas, Dulay and Laurente

Statement of Liquidation
June 30,2019

Cash NCA Liabilities Arenas,

Capital
Balance before
Liquidation 50,000 2,350,000 400,000 900,000
Sale of Non-Cash
300,000 Assets 2,650,000 -2,350,000 100,000
Balance 2,700,000 400,000 1,000,000
Payment of
Liabilities -400,000 -400,000
2,300,000 Balance 2,300,000 1,000,000
Payment to
Partners -2,300,000 -1,000,000

Sale of Non-Cash Assets

Cash 2,650,000
Non-Cash Assets 2,350,000
Gain on Realization 300,000

Distribution of Gain on Realization

 Gain on Realization 300,000
Arenas,Capital 100,000
Dulay,Capital 100,000
Laurente,Capital 100,000

Payment of Liabilities
Liabilities 400,000
Cash 400,000

Distribution of Cash to Partners

Arenas,Capital 1,000,000
Dulay,Capital 600,000
Laurente,Capital 700,000
Cash 2,300,000

Problem #2 Lump-Sum Liquidation with Loss on Realization

After several years of operations, the partnership of Miranda, Leon and Estoque is to
be liquidated. After making the closing entries on March 31, 2019 the following
accounts remained open:
Account Balance
Account Title Debit Credit
Cash 150,000
Other Assets 2,500,000
Liabilities 750,000
Miranda,Capital 400,000
Leon, Capital 600,000
Estoque,Capital 1,000,000

The non-cash assets are sold for P2,150,000. Profits and losses are shared equally.
Required:
Prepare a statement of partnership liquidation and the entries to record the following:
1. Sale of non cash assets
2. Distribution of Gain on Realization
3. Payment of Liabilities
4. Distribution of cash to the partners

Miranda, Leon, and Estoque

Statement of Liquidation
March 31,2019

Cash Non-Cash Liabilities Miranda,

Assets Capital
Balances Before
Liquidation 150,000 2,600,000 750,000 400,000
Sale of Non-Cash
Assets and Distribution
of Losses 2,150,000 -2,600,000 -150,000
Balances 2,300,000 750,000 250,000
Payment of Liabilities
to Outsiders -750,000 -750,000
Balances 1,550,000 250,000
Payment to
Partners -1,550,000 -250,000

Sale of Non-Cash Assets

Cash 2,150,000
Loss on Realization 450,000
Non-Cash Assets 2,600,000

Distribution of Loss on Realization

Miranda,Capital 150,000
Leon, Capital 150,000
Estoque,Capital 150,000
Loss on Realization 450,000

Payment of Liabilities
Liabilities 750,000
Cash 750,000

Distribution of Cash to Partners

Miranda,Capital 250,000
Leon, Capital 450,000
Estoque, Capital 850,000
Cash 1,550,000
is to be liquidated.

Dulay, Laurente,
Capital Capital

500,000 600,000

100,000 100,000
600,000 700,000

600,000 700,000

-600,000 -700,000
Leon Estoque
Capital Capital

600,000 1,000,000
-150,000 -150,000
450,000 850,000

450,000 850,000

-450,000 -850,000
Problem #3 Lump-Sum Liquidation
Gulane, Tormis, and Sailadin decided to liquidate their partnership on June 30,201
The partners shared profits and losses in the ratio of 2:2:1, respectively.The firm's
post-closing trial balance follows:

Gulane, Tormis, and Sailadin

Post-Closing Trial Balance
June 30,2019

Accounts Name Debit Credit

Cash 419,170
Merchandise Invent 612,300
Other Assets 472,680
Accounts Payable 131,350
Gulane, Capital 561,600
Tormis, Capital 436,800
Sailadin, Capital 374,400
1,504,150 1,504,150

The merchandise inventory and the other assets were sold for P582,800 and P550,900, respectively.
Prepare the liquidation journal entries.

Sale of Non-Cash Assets

Cash 582,800
Loss on Realization 29,500 (582,800-612,300=-29,500)
Merchandise Inventory 612,300

Distribution of Loss on Realization

Gulane,Capital 11,800 (29,500×2/5=11,800)
Tormis, Capital 11,800 (29,500×2/5=11,800)
Sailadin,Capital 5,900 (29,500×1/5=5,900)
Loss on Realization 29,500

Sale of Non-Cash Assets

Cash 550,900
Other Assets 472,680
Gain on Realization 78,220 (550,900-472,680=78,220)

Distribution of Gain on Realization

Gain on Realization 78,220
Gulane,Capital 31,288 (78,220×2/5=31,288)
Tormis,Capital 31,288 (78,220×2/5=31,288)
Sailadin,Capital 15,644 (78,220×1/5=15,644)

Payment of Liabilities
Accounts Payable 131,350
Cash 131,350

Distribution of Cash to Partners

Gulane,Capital 581,088
Tormis, Capital 465,288
Sailadin, Capital 384,144
Cash 1,421,520

Problem #4 Lump-Sum Liquidation

Mima Villanueva and Christine Resultay are about to liquidate their partnership. They each have
P200,000 capital balances, and they share profits and losses in a 3:1 ratio, respectively. In addition,
the partnership has P250,000 in cash, P450,000 in non-cash assets and P300,000 in accounts
payable. Assuming that the noncash assets are sold for P170,000 and that both partners are
personally solvent, prepare all the liquidation entries.

Sale of Non-Cash Assets

Cash 170,000
Loss on Realization 280,000
Non-Cash Assets 450,000

Distribution of Loss on Realization

Villanueva,Capital 210,000
Resultay, Capital 70,000
Loss on Realization 280,000

Payment of Liabilities
Accounts Payable 300,000
Cash 300,000

Additional Investment by Deficient Partner

Cash 10,000
Villanueva,Capital 10,000

Distribution of Cash to Partners

Resultay, Capital 130,000
Cash 130,000
P550,900, respectively.
hip. They each have
spectively. In addition,
000 in accounts
th partners are
Problem #5 Lump-sum Liquidation
Escareal, Acosta, and Lopez are liquidating their business. They share profits and losses in a 2:3:1 ratio,
respectively, and currently have capital balancesof P300,000,P210,000, and P390,000, respectively. In
addition, the partnership has P150,000 in cash, P250,000 in accounts payable, and P1,000,000 in noncash
assets. Escareal and Lopez are personally solvent, but Acosta is not. Assuming that the noncash assets are
sold for P460,000, prepare the liquidation journal entries.

Sale of Non-Cash Assets

Cash 460,000
Loss on Realization 540,000
Non-Cash Assets 1,000,000

Distribution of Loss on Realization

Escareal,Capital 180,000
Acosta,Capital 270,000
Lopez,Capital 90,000
Loss on Realization 540,000

Payment of Liabilities
Liabilities 250,000
Cash 250,000

Deficiency Absorbed by Solvent Partners

Escareal,Capital 40,000
Lopez,Capital 20,000
Acosta, Capital 60,000

Distribution of Cash to Partners

Escareal,Capital 80,000
Lopez,Capital 280,000
Cash 360,000

Problem #6 Lump-Sum Liquidation

On Dec. 31,2019, the Modesto and Corpuz Partnership had the following assets, liabilities and partners' eq

Assets Liabilities Modesto, Capi Corpuz, Capital

1,200,000 = 150,000 600,000 + 450,000

When partners agreed to liquidate the business, the assets were sold for P900,000 and the liabilities were
Modesto and Corpuz share profits and losses in a 2:1 ratio, respectively.
Required: What is the final cash distribution to each partner after liquidation?

Cash NCA Liabilities Modesto, Corpuz,

Capital Capital
Balance 0 1,200,000 150,000 600,000 450,000
Sale of NCA 900,000 -1,200,000 -200,000 -100,000
Balance 900,000 150,000 400,000 350,000
Payment of Liabilities -150,000 -150,000
Balance 750,000 400,000 350,000
Payment to Partners -750,000 -400,000 -350,000

Problem #7 Distribution of Cash upon Liquidation

Cynthia Natividad and Domingo Ungria Jr., with capital balances of P340,000 and P360,000, respectively,
decided to liquidate their partnership. After selling the noncash assets and paying the liabilities, there is
P820,000 of cash remaining. If the partners share profits and losses equally, how should the cash
be distributed?
Cash NCA Natividad, Ungria,
Capital Capital
700,000 340,000 360,000 700,000
120,000 820,000 -700,000 60,000 60,000
820,000 400,000 420,000
-820,000 -400,000 -420,000
 d losses in a 2:3:1 ratio,
90,000, respectively. In
and P1,000,000 in noncash
hat the noncash assets are

, liabilities and partners' equity:

000 and the liabilities were paid.

d P360,000, respectively,
ng the liabilities, there is
w should the cash
Problem #8 Distribution of Cash upon Liquidation
Romulo Soria and Elizabeth Paras are partners, sharing profits and losses equally. They decide to terminat
their partnership. Prior to realization, their capital balances are P150,000 and P70,000, respectively. After
all noncash assets are sold and all liabilities are paid, there is a cash balance of P160,000.

Required:
1. What is the amount of loss or gain on realization? The loss on realization amounted to P60,000.
2. How should the loss or gain be divided between the partners? Losses are divided equally; P30,00
3. How much cash should be distributed to each partner? P120,000 for Soria and P40,000 to

Cash Soria, Capital Paras,Capital

60,000 160,000 150,000 70,000 220,000
-30,000 -30,000
160,000 120,000 40,000 160,000
-160,000 -120,000 -40,000

Problem #9 Lump-Sum Liquidation

Roberto Orcajada and Ryan Morales are partners who share profits and losses equally.
The credit balances of their capital accounts before liquidation are P700,000 and
P900,000, respectively. They decided to liquidate their partnership. They sold all the
noncash assets and paid all the partnership's liabilities, leaving a balance of
P1,100,000 in cash.

Required:
1. What is the amount of loss or gain on realization? The loss on realization amounted to P500,000.
2. How much cash should be distributed to each partner? P450,000 for Orcajada and P650,000 for Moral

Orcajada, Morales,
Cash Capital Capital
0 700,000 900,000 1,600,000
-500,000 1,100,000 -250,000 -250,000
1,100,000 450,000 650,000 1,100,000

Problem #10 Lump-Sum Liquidation

On Dec. 31, 2019, the Hungria and Blanche Partnership had the following assets,
liabilities, and partners' equity:

Assets Liabilities Hungria,Capital Blanche, Capital

P1,000,000 P=250,000 P400,000 + P350,000

When the partners agreed to liquidate their business, the assets were sold for P800,000
and the liabilities were paid. Hungria and Blanche share profits and losses in a ratio of
3:1, respectively. What is the final cash distribution to each partner after liquidation?

75% 25%
Cash NCA Liabilities Hungaria, Blanche,
Capital Capital
1,000,000 250,000 400,000 350,000
200,000 800,000 -1,000,000 -150,000 -50,000
800,000 250,000 250,000 300,000
-250,000 -250,000
550,000 250,000 300,000
-550,000 -250,000 -300,000
P250,000 for Hungria and P300,000 for Blanche.
 ally. They decide to terminate
d P70,000, respectively. After
of P160,000.

tion amounted to P60,000.

es are divided equally; P30,000 each
,000 for Soria and P40,000 to Paras.

tion amounted to P500,000.

jada and P650,000 for Morales.

r P800,000
550,000
Problem #11 Lump-Sum Liquidation
Aparece, Bantilles and Lerin have decided to liquidate their partnership on Dec. 1, 2019.
The statement of financial position is shown below:
ABL Partnership
Statement of Financial Position
Dec. 1, 2019

Assets
Cash P 25,000
Accounts Receivable (net) 75,000
Inventories 100,000
Property and Equipment (net) 300,000
Total Assets P 500,000

Liabilities and Capital

Liabilities
Accounts Payable P 240,000
Loan Payable -Bantilles 30,000
Total Liabilities P 270,000
Capital:
Aparece, Capital 120,000
Bantilles, Capital 50,000
Lerin, Capital 60,000
Total Capital 230,000
Total Liabilities and Capital P 500,000

Additional Information:
a. The personal assets(excluding partnership capital and loan interests) and personal
liabilities of each partner as of Dec. 1,2019, are presented below:
Aparece Bantilles Lerin
Personal Assets P 250,000 P 300,000 P 350,000
Personal Liabilities -230,000 -240,000 -325,000
Personal net worth P 20,000 P 60,000 P 25,000
b. Aparece, Bantilles, and Lerin share profits and losses in the ratio 20:40:40, respectively.
c. According to the parnership agreement, interest will not accrue on partners' loan
balances during the liquidation process.
d. All of non-cash assets were sold on Dec. 10,2019 for P260,000.

Required: Prepare a statement of liquidation.

ABL Partnership
Statement of Liquidation
Dec. 1, 2019
 Cash Non-Cash Liabilities Loan Payable-
Assets Bantilles
P/L Percentages
Balances Before
Liquidation 25,000 475,000 240,000 30,000
Sale of Non-Cash
Assets and Distribution
of Losses 260,000 -475,000
Balances 285,000 240,000 30,000
Payment of Liabilities -240,000 240,000
Balances 45,000 30,000
Right of Offset by Bantilles -30,000
Balances 45,000
Additional Investments
by Bantilles and Lerin 31,000
Balances 76,000
Additional Losses
to Aparece
Balances 76,000
Payment to Partners -76,000
Aparece, Bantilles, Lerin,
Capital Capital Capital
20% 40% 40%

120,000 50,000 60,000

-43,000 -86,000 -86,000

77,000 -36,000 -26,000

77,000 -36,000 -26,000

30,000
77,000 -6,000 -26,000

6,000 25,000
77,000 -1,000

-1,000 1,000
76,000
-76,000
Problem #12 Final Cash Distribution to Partners
The partnership of Sarabia, Selisana and Gevera is about to be liquidated. All the assests
have been sold for cash and the creditors have been fully paid. The capital accounts of
the partners have the following balances at the date of liquidation:

Sarabia 600,000 credit

Selisana 240,000 debit
Gevera 360,000 credit

The three partners share profits and losses equally. There remains P720,000
cash for distribution to the partners.
Required:
Determine the manner of distribution of the remaining P720, 000 under the following independent assum
1. Selisana is personally insolvent. He has no personal assets.
2. Selisana is personally solvent and is willing to contribute additional funds into the partnership to cover
3. Selisana is willing to make additional contributions but his personal assets
are not sufficient to accommodate the deficit in his capital account. Only 60%
of the deficiency can be covered.

Assumption 1:
Cash Sarabia, Selisana, Gevera,
Capital Capital Capital
Balances 720,000 600,000 -240,000 360,000
Additional Losses
to Sarabia and
Gevera -120,000 240,000 -120,000
Balances 720,000 480,000 240,000
Payment to
Partners -720,000 -480,000 -240,000

Assumption 2:
Cash Sarabia, Selisana, Gevera,
Capital Capital Capital
Balances 720,000 600,000 -240,000 360,000
Additional
Investment by
Selisana 240,000 240,000
Balances 960,000 600,000 360,000
Payment to
Partners -960,000 -600,000 -360,000

Assumption 3:
Cash Sarabia, Selisana, Gevera,
Capital Capital Capital
Balances 720,000 600,000 -240,000 360,000
Additional
Investment by
Selisana 144,000 144,000
Balances 864,000 600,000 -96,000 360,000
Additional Losses
to Sarabia and
Gevera -48,000 96,000 -48,000
Balances 864,000 552,000 312,000
Payment to
Partners -864,000 -552,000 -312,000
 the assests
ccounts of

ollowing independent assumptions:

nto the partnership to cover his deficit.

Problem #13 Preparation of Journal Entries for Partnership Liquidation
Tugade, Masinsin, and Biore are all famous athletes who have been operating a sports
memorabilia store for many years. The partnership decided to liquidate its operation
rather than sell the business because they are each about to retire and want to go their
separate ways. They have been sharing profits and losses in the ratio of 40% to Tugade, 40% to Masinsin,
and 20% to Biore. The trial balance for their business on Jan. 1, 2019 follows:
Trial Balance
1-Jan-19
Cash P 42,000
Accounts Receivable 189,600
Allowance for Uncollectible Accounts P11,100
Merchandise Inventory 293,100
Prepaid Insurance 9,000
Land 120,000
Office Equipment 31,500
Accu. Depreciation - Office Equipment 10,500
Machinery 81,600
Accu. Depreciation - Machinery 32,100
Building 375,000
Accu. Depreciation - Building 112,500
Notes Payable 120,000
Accounts Payable 220,500
Mortgage Payable 240,000
Tugade, Capital 135,000
Masinsin, Capital 60,000
Biore, Capital 200,100
Totals P1,141,800 P1,141,800

In January 2019, the events took place during the process of liquidating the partnership:
Jan. 6 Accounts receivable of P151,500 are collected, and the allowance for
uncollectible accounts are written off the book.
9 Merchandise Inventory is sold for P160,500.
11 A refund on the prepaid insurance is expected totaling P3,000.
14 Property and equipment were sold lump sum to Sibug Company for P111,000.
The mortgage on the building was also transferred to Sibug.
20 The remaining creditors were paid in full.
20 The deficit in Masinsin's capital account was absorbed by Tugade and Biore.
20 The deficit in Tugade's capital account was absorbed by Biore.
24 The remaining partnership cash is distributed to Biore.
Required: Prepare the journal entries to record the transactions. Allocate any gain or
loss on realization to the partners' capital accounts at the time of the transaction. It is
to assumed that any capital deficiency is insolvent and will not be able to
contribute any personal assets to cover it.
5-Jan Cash 151,500
 Loss on Realization 27,000
Non-Cash Assets 178,500

Tugade, Capital 10,800

Masinsin,Capital 10,800
Biore,Capital 5,400
Loss on Realization 27,000

9 Cash 160,500
Loss on Realization 132,600
Non-Cash Assets 293,100

Tugade, Capital 53,040

Masinsin,Capital 53,040
Biore,Capital 26,520
Loss on Realization 132,600

11 Cash 3,000
Loss on Realization 6,000
Non-Cash Assets 9,000

Tugade, Capital 2,400

Masinsin,Capital 2,400
Biore,Capital 1,200
Loss on Realization 6,000

14 Cash 111,000
Loss on Realization 222,000
Non-Cash Assets 333,000

Tugade, Capital 88,800

Masinsin,Capital 88,800
Biore,Capital 44,400
Loss on Realization 222,000

20 Liabilities 340,500
Cash 340,500

Tugade,Capital 63,360
Biore,Capital 31,680
Masinsin,Capital 95,040

Biore,Capital 83,400
 Tugade,Capital 83,400

24 Biore,Capital 7,500
Cash 7,500

Jan.
Tugade Masinsin Biore
135,000 60,000 200,100
6 -10,800 -10,800 -5,400
124,200 49,200 194,700
9 -53,040 -53,040 -26,520
71,160 -3,840 168,180
11 -2,400 -2,400 -1,200
68,760 -6,240 166,980
14 -88,800 -88,800 -44,400
-20,040 -95,040 122,580
20 -63,360 95,040 -31,680
-83,400 90,900
24 83,400 -83,400
7,500
-7,500
Tugade, 40% to Masinsin,
Problem #14 Lump-Sum Liquidation: Comprehensive Problem
Dulay, Sandoval and Ramel are partners in a law firm. They share profits and losses in a 5:3:2
ratio. The partnership agreement provided for annual salaries of P400,000, P350,000 and
P300,000, respectively, interest of 12% on their Jan. 1 capital balances and any balance to
be divided in the profit and loss ratio.
The partner's capital balances as of Jan. 1,2019 were Dulay, P1,200,000; Sandoval,
P750,000 and Ramel, P500,000. No additional investments were made during the year.
Profit for 2019 was P1,600,000. Partner's withdrawals for the year were as follows:
Dulay, P500,000; Sandoval, P400,000 and Ramel, P350,000.
On Mar. 4, 2020, the partners decided to liquidate their law firm. On that date,
the firm has a cash balance of P460,000, non-cash assets of P2,740,000 and liabilities
of P400,000. No additional investments or withdrawals have been made in 2020. Between
Mar. 5 and Mar. 31, the non-cash assets are sold for P2,900,000, the gain is divided in the
profit and loss ratio. The liabilities are paid and the remaining cash is then distributed to the partners.
Required:
1. Prepare the bottom portion of the statement of comprehensive income for the year ended
Dec. 31, 2019, showing the manner of allocation of the profit.
2. Prepare the journal entry to close the income summary against the partner's
capital accounts as of Dec. 31, 2019.
3. Prepare the statement of changes in partner's equity for the year ended
Dec. 31, 2019.
4. Prepare the journal entries as of Mar. 31, 2020 for the following:
a. sale of the non-cash assets.
b. distribution of gain on realization.
c. payment of liabilities.
d. distribution of remaining cash to the partners.
5. Prepare a statement of liquidation for the period Mar. 5 to Mar. 31, 2020.

Dulay, Sandoval, and Ramel

Statement of Comprehensive Income
For the Year Ended Dec. 31,2019

Profit 1,600,000
Less:
Salaries to Partner
Dulay 400,000
Sandoval 350,000
Ramel 300,000 1,050,000
Interest to Partner (12%)
Dulay 144,000 1,200,000×12%=144,000
Sandoval 90,000 750,000×12%=90,000
Ramel 60,000 294,000 1,344,000 500,000×12%=60,000
Net Profit after Distribution
of Salary and Interest 256,000
Profit Share of the Partner
Dulay (50%) 128,000
Sandoval (30%) 76,800
Ramel (20%) 51,200

Income Summary 1,600,000

Dulay,Capital 672,000 Dulay: 400,000+144,000+128,000
Sandoval, Capital 516,800 Sandoval: 350,000+90,000+76,80
Ramel, Capital 411,200 Ramel: 300,000+60,000+51,200=
To close income summary against partners' capital accounts.

Dulay, Sandoval, and Ramel

Statement of Changes in Partners' Equity
For the Year Ended Dec. 31,2019

Dulay Sandoval Ramel

Beginning Capital Balance 1,200,000 750,000 500,000
Less: Withdrawals 500,000 400,000 350,000
Balances 700,000 350,000 150,000
Add:Profit 672,000 516,800 411,200
Partners' Equity, Dec. 31 1,372,000 866,800 561,200

Sale of Non-Cash Assets

Cash 2,900,000
Non-Cash Assets 2,740,000
Gain on Realization 160,000

Distribution of Gain on Realization

Gain on Realization 160,000
Dulay,Capital 80,000
Sandoval,Capital 48,000
Ramel,Capital 32,000

Payment of Liabilities
Liabilities 400,000
Cash 400,000

Distribution of Cash to Partners

Dulay,Capital 1,452,000
Sandoval,Capital 914,800
Ramel,Capital 593,200
Cash 2,960,000
 Dulay, Sandoval and Ramel
Statement of Liquidation
March 31,2020

Cash Non-Cash Liabilities Dulay,

Assets Capital
P/L Percentages 50%
Balances Before
Liquidation 460,000 2,740,000 400,000 1,372,000
Sale of Non-Cash
Assets and Distribution
of Gains 2,900,000 -2,740,000 80,000
Balances 3,360,000 400,000 1,452,000
Payment of Liabilities
to Outsiders -400,000 -400,000
Balances 2,960,000 1,452,000
Payment to
Partners -2,960,000 -1,452,000
d losses in a 5:3:2
P350,000 and
ny balance to

ng the year.

2020. Between
divided in the
istributed to the partners.

or the year ended

00,000×12%=144,000
,000×12%=90,000
,000×12%=60,000
ay: 400,000+144,000+128,000= 672,000
doval: 350,000+90,000+76,800= 516,800
mel: 300,000+60,000+51,200= 411,200
Sandoval, Ramel,
Capital Capital
30% 20%

866,800 561,200

48,000 32,000
914,800 593,200

914,800 593,200

-914,800 -593,200
 Problem #15 Installment Liquidation: Cash Priority Program
The assets and equities of the Perdales, Ceballus, and Bandonell partnership at the end
of its fiscal year ended Oct. 31, 2019 are as follows:

Assets Equities
Cash P15,000 Liabilities
Receivable-net 20,000 Loan from Bandonell
Inventory 40,000 Perdales, Capital (30%)
Property and Equipment 70,000 Ceballus, Capital (50%)
Loan to Ceballus 5,000 Bandonell, Capital (20%

The partners decided to liquidate the partnership. They estimated that the non-cash
assets, other than the loan to Ceballus, can be converted into P100,000 cash over the
two-month period ending Dec. 31, 2019. Cash is to be distributed to the appropriate
parties as it becomes available during the liquidation process.

Required:
1. The partner most vulnerable to partnership losses on liquidation is:
a. Perdales
b. Bandonell
c. Ceballus
d. Ceballus and Perdales equally

2. If 65,000 is available for the first distribution, it should be paid to

Priority Creditors Perdales Ceballus Bandonell
a. 60,000 5,000 0 0
b. 50,000 12,000 0 3,000
c. 60,000 1,500 2,500 1,000
d. 50,000 5,000 0 10,000

3. If the total amount of P7,500 is available for the distribution to partners after all
outside liabilities are paid, it should be paid as follows:
Perdales Ceballus Bandonell
a. 7,500 0 0
b. 0 3,750 3,750
c. 2,250 3,750 1,500
d. 2,500 2,500 2,500

1 Perdalles Ceballus Bandonell

Capital bal. 45,000 30,000 15,000
Loan Balances -5,000 10,000
Partner's Total Interest 45,000 25,000 25,000
P/L ratio 30% 50% 20%
Loss Absorption Balances 150,000 60,000 125,000
 Ceballus is the most vulnerable to losses since he has the lowest loss absorption balance.

2 Priority 1: To Perdalles -25,000

125,000 60,000 125,000
-65,000 -65,000
Priority II: To Perdalles and Bandonell 60,000 60,000 60,000

D. Priority Creditors Perdalles Ceballus Bandonell

50,000 5,000 0 10,000

3 A. Perdalles Ceballus Bandonell

7,500 0 0

Problem #16 Installment Liquidation: Schedule of Safe Payments

The statement of financial position for Paraiso and Ligeralde Partnership on June 1,2019
before liquidation is as follows:
Assets Liabilities and Capital
Cash P50,000 Liabilities
Other Assets 550,000 Paraiso, Capital
Ligeralde, Capital
Total Assets P600,000 Total Liabilities & Capital

Partners Paraiso and Ligeralde share profits and losses 60:40, respectively. In June,
assets with a book value of P220,000 were sold for P180,000, creditors were paid in full,
and P20,000 was paid to the partners. In July, assets with a book value of P100,000 were sold
for P120,000, liquidation expenses of P5,000 were paid and cash of P125,000 was paid
to partners. In August, the remaining assets were sold for P225,000.
Required:
1. How much cash should Ligeralde receive in June? P20,000
2. How much cash should Paraiso receive in July? P66,000
3. How much cash should Ligeralde and Paraiso receive in August? Ligeralde should receive P13

Paraiso and Ligeralde Patrnership

Staterment of Liquidation
June-August, 2019

Profit & Loss Ratio

Transaction Cash Other Assets Liabilities
Balances before Liquidation 50,000 550,000 200,000
June Realization and Distribution of Losses 180,000 -220,000
Balances 230,000 330,000 200,000
Payment of Liabilities 200,000 -200,000
Balances 30,000 330,000
Payment to Partners- June -20,000
Balances 10,000 330,000
July Realization and Distribution of gain 120,000 100,000
Payment of Liquidation Expense -5,000
Balances 125,000 230,000
Payment to Partners- July -125,000
Balances 230,000
August Realization and Distribution of losses 225,000 -230,000
Balances 225,000
Payment to Partners- August -225,000
P50,000
10,000
45,000
30,000
15,000
on balance.
cash priority payment
Perdalles Ceballus Bandonell
7,500

19,500 13,000
27,000 0 13,000

lities and Capital

P200,000
225,000
175,000
P600,000

000 were sold

geralde should receive P135,000 while Paraiso should receive P90,000

hip

60% 40%
Paraiso, Capital Ligeralde, Capital
225,000 175,000
-24,000 -16,000
201,000 159,000
201,000 159,000
-20,000
201,000 139,000
6,000 8,000
-3,000 -2,000
204,000 145,000
-66,000 -53,000
138,000 92,000
-3,000 -2,000
135,000 90,000
-135,000 -90,000
 Problem #17 Installment Liquidation: Schedule of Safe Payments
Partners Limin, Parducho, and Calingasan share profits and losses in the ratio of 5:3:2.
The partners decided to liquidate the partnership. Their statement of financial position
prior to liquidation is:
Assets Liabilities & Capital
Cash P400,000 Liabilities
Other Assets 2,100,000 Limin,Loan
Limin,Capital
Parducho, Capital
Calingasan, Capital
Total Assets P2,500,000 Total Liabilities and Capital

The partnership is to be liquidated by installment. The first sale of non-cash assets

costing P1,200,000 realized P900,000. Liquidation expenses paid amounted to P20,000.
Required:
How much cash should be distributed to each partner?

Cash NCA Liabilities

400,000 2,100,000 600,000
-300,000 First Sale on NCA 900,000 -1,200,000
Balances 1,300,000 900,000 600,000
Payment of Expense -20,000
Balances 1,280,000 900,000 600,000
First-Payment of Liab -600,000 -600,000
Balances 680,000 900,000

Schedule 1
Limin Parducho
Balance 240,000 624,000
Loan Balance 80,000
Total Interest 320,000 624,000
Restricted Interest
900,000 -450,000 -270,000
Balances -130,000 354,000
Restricted Interest
3:2 ratio 130,000 -78,000
Free Interest 0 276,000
Problem #18 Installment Liquidation: Cash Priority Program
The capital loan balances for partners Bernardino, Lee and Ong are shown below:
They share profits or losses in the ratio of 4:4:2, respectively.
Loans Payable-Bernardino P100,000
Loans Payable- Lee 100,000
Loans Payable- Ong 150,000
Bernardino, Capital 150,000
Lee, Capital 350,000
Ong, Capital 200,000
P1,050,000
Required:
1. Prepare a cash priority program.
2. Assume that P250,000 cash is available for initial distribution, prepare
the entries to record the distribution to the partners.
Bernardino, Lee and Ong
Cash Priority Program
Bernardino Lee
Capital Balances before liquidation 150,000 350,000
Add: Loan Balances 100,000 100,000
Partners' Total Interests 250,000 450,000
Divide by profit/loss ratio 40% 40%
Loss Absorption Potential 625,000 1,125,000
Priority I: To Ong
Balances 625,000 1,125,000
Priority II: To Lee and Ong 500,000
625,000 625,000
Priority III: Amounts in excess of 425,000 based on P/L Ratio
Assume that 250,000 cash is available for initial distribution, prepare the entries to record the distrib
Bernardino Lee Ong

Priority I 125,000
Priority II (2:1) 83,333 41,667
83,333 166,667
 the ratio of 5:3:2.
of financial position

es & Capital
P600,000
80,000
400,000
720,000
700,000
P2,500,000

on-cash assets
mounted to P20,000.

Limin,Loan Limin,Cap. Parducho, Capital

Calingasan, Capital
80,000 400,000 720,000 700,000
-150,000 -90,000 -60,000
80,000 250,000 630,000 640,000
-10,000 -6,000 -4,000
80,000 240,000 624,000 636,000

80,000 240,000 624,000 636,000

Calingasan
636,000

636,000

-180,000
456,000

-52,000
404,000
shown below:

Cash Priority Payments to

Ong Bernardino Lee Ong
200,000
150,000
350,000
20%
1,750,000
625,000 125,000
1,125,000
500,000 200,000 100,000
625,000 - 200,000 225,000 425,000

e the entries to record the distribution.

Total Entries:
Ong, Capital 166,667
125,000 Lee, Capital 83,333
125,000 Cash 250,000
250,000
Problem #19 Installment Liquidation: Cash Priority Program
The loan and capital account balances of Santiago, Gorospe, Esparaguera, and Ronzales
were as follows on Sept. 25, 2019, the date that the partnership began liquidation:
Debit
Loan Receivable-Esparaguera P10,000
Loan Payable- Santiago
Santiago, Capital
Gorospe, Capital
Esparaguera, Capital
Ronzales, Capital

Partnership liabilities totaled P80,000 on Sept. 25, 2019. The partners shared profits
and losses and realization gains and losses as follows: Santiago, 20%;
Gorospe, 25%; Esparaguera, 30%; and Ronzales, 25%.
Required: Prepare the cash priority program.

Santiago, Gorospe, Esparaguera & R

Cash Priority Program
25-Sep-19

Santiago Gorospe Esparaguera

Capital Balances 50,000 25,000 70,000
Add: Loan Balance 20,000 -10,000
Partners' Total Interest 70,000 25,000 60,000
Divided by: Profit and Loss Ratio 20% 25% 30%
Loss Absorption Balances 350,000 100,000 200,000
Priority 1-Santiago -150,000
Balance 200,000 100,000 200,000
Priority 2-Santiago, Esparaguera & Ronzales -100,000 -100,000
Balances 100,000 100,000 100,000

Problem #20 Installment Liquidation

Espeleta and De Guia decided to dissolve and liquidate Espeleta and De Guia on
Sept. 23, 2019. On that date, the statement of financial position of the partnership is as follows:

Espeleta and De Guia

Statement of Financial Position
Sept. 23, 2019
Assets Liabilities and Partners'Capital
Cash P 5,000 Accounts Payable -Trade
Other Assets 100,000 Loan Payable- De Guia
Espeleta, Capital
De Guia, Capital
Total P105,000 Total

On Sept. 23,2019, non-cash assets with a carrying amount of P70,000 realized P60,000
and P64,000 was paid to creditors and partners, P1,000 being retained to cover possible
liquidation costs. On Oct. 1, 2019, the remaining non-cash assets realized P18,000
(net of liquidation costs), and all available cash was distributed to partners. Espeleta and
De Guia share profits and losses 40% and 60%, respectively.
Required:
1. Prepare the cash priority program.
2. Prepare the journal entries to record the realization of assets and distribution
of cash to creditors and partners.

Espeleta and De Guia

Cash Priority Program
Sept. 23 2019

Espeleta, Capital
De Guia, Capital
Capital Balances 60,000 20,000
Add: Loan Balances 10,000
Partner's Total Interest 60,000 30,000
Divide: P/L ratio 40% 60%
Loss on Absorption Balances 150,000 50,000
Priority I: To Espeleta -100,000
50,000 50,000

Priority II: Amount in excess of P 40,000 based on P/L ratio

For the month of September, 2019

1. Sales on Non-Cash Assets

Cash 60,000
Loss on Realization 10,000
Non-Cash Assets
Distribution of Loss on Realization based on P/L ratio
Espeleta, Capital 4,000
De Guia, Capital 6,000
Loss on Realization

2. Payment to outside creditors

Accounts Payable-Trade 15,000
Cash

3. Distribution of Cash to Partners

Espeleta, Capital 43,600
 Loan Payable- De Guia 5,400
Cash

For the month of October, 2019

1. Sales on Non-Cash Assets

Cash 18,000
Loss on Realization 12,000
Non-Cash Assets
Distribution of Loss on Realization based on P/L ratio
Espeleta, Capital 4,800
De Guia, Capital 7,200
Loss on Realization

3. Distribution of Cash to Partners

Espeleta, Capital 7,600
Loan Payable- De Guia 4,600
De Guia, Capital 6,800
Cash
and Ronzales

Credit

P20,000
50,000
25,000
70,000
50,000

ago, Gorospe, Esparaguera & Ronzales

Cash Priority Program
25-Sep-19
Cash Priority Payments to
Ronzales Santiago (20%)Gorospe (25%) Esparaguera (30%) Ronzales (25%)
50,000

50,000
25%
200,000
30,000
200,000
-100,000 20,000 30,000 25,000
100,000 50,000 30,000 25,000

tnership is as follows:

Partners'Capital
P15,000
10,000
60,000
20,000
 P105,000

zed P60,000
cover possible

. Espeleta and

Cash Priority Payments To:

Espeleta De Guia

40,000
40,000 0

40% 60%

Computation:
Sales on non-cash assets 60,000
Cash 5,000
Less: Liabilities -15,000
70000 Retained to cover possible losses -1,000
49,000

Espeleta
10,000 Priority I: To Espeleta 40,000
Priority II: 40:60 ratio
Espeleta: 9,000 x 40% 3,600
De Guia: 9,000 x 60%
15000 43,600
49,000

Espeleta
30000 Priority I: To Espeleta 7,600
Balances: De Guia (LP)
De Guia:
7,600
12,000

19,000
De Guia Total
40,000
9,000

5,400
5,400 49,000
De Guia Total
19,000
4,600
6,800
11,400 19,000
Problem #21 Installment Liquidation
On Jan. 31,2019, the partners Valdez, Navarro, and Pamittan authorized the liquidation
of their partnership. The statement of financial position is as follows:

Valdez, Navarro and Pamittan

Statement of Financial Position
January 31,2019
Assets Liabilities and Partners' Capital
Cash P10,000 Accounts Payable-Trade
Loan Receivable-Navarro 50,000 Loan Payable-Valdez
Other Assets(net) 240,000 Valdez,Capital
Navarro, Capital
Pamittan, Capital
Total Assets P300,000 Total Liabilities and Capital
Additional Information for 2019:
a. The partners' profit and loss sharing ratio was Valdez, 40%; Navarro, 40%; and Pamittan, 20%.
b. On Feb. 1, non-cash assets with a book value of P180,000 realized P140,000, and all
available cash was paid to the creditors and partners.
c. On Feb. 4, non-cash assets with a book value of P60,000 realized P50,000, and that
amount was paid to the partners.
d. on Feb, 5, Navarro, who was almost insolvent, paid P30,000on the loan from the
partnership. Valdez and Pamittan agreed that the partnership would receive no more
cash from Navarro, and they instructed the accountant to close the partnership's accounting records.
Required:
1. Prepare the cash priority program.
2. Prepare the journal entries.

Cash Priority Program

Valdez Navarro Pamittan

Capital Balances 140,000 -70,000 80,000
Loan Balance 60,000 -50,000
Total Interests 200,000 -120,000 80,000
Divide P/L 40% 40% 20%
Loss Absorption Potential 500,000 -300,000 400,000
Priority I -100,000
Balances 400,000 -300,000 400,000
Priority II -700,000 -700,000
Balances -300,000 -300,000 -300,000

Statement of Liquidation

Cash NCA Liabilities

Feb
Beg. Balances 10,000 240,000 90,000
1 Realization of NCA and dist. of loss 140,000 -180,000
Balances 150,000 60,000 90,000
1 Payment of Liabilities -90,000 -90,000
Balances 60,000 60,000 -
1 Priority I -40,000
Balances 20,000 60,000 -
1 Priority II (280:140) -20,000
Balances - 60,000 -
4 Realization of NCA and dist. of loss 50,000 -60,000
Balances 50,000 - -
4 Priority II Balance -50,000
Balances - - -
5 Payment from Navarro 30,000
Balances 30,000
5 Absorption of Capital Deficiency
Balances 30,000
5 Payment to Partners -30,000

Feb.
1 Sale of Non-Cash Assets
Cash 140,000
Loss on Realiza 40,000
Non cash Asset 180,000

1 Distribution of Loss on Realization

Valdez, Capital 16,000
Navarro, Capita 16,000
Pamittan, Capit 8,000
Loss on Realization 40,000

1 Payment of Liabilities
Liabilities 90,000
Cash 90,000

1 Payment to Priority 1
Valdez, Capital 40,000
Cash 40,000

1 Payment to Priority 2
Valdez, Capital 13,333
Pamittan, Capit 6,667
Cash 20,000
4 Sale of Non-Cash Assets
Cash 50,000
Loss on Realiza 10,000
Non cash Asset 60,000

4 Distribution of Loss on Realization

Valdez, Capital 4,000
Navarro, Capita 4,000
Pamittan, Capit 2,000
Loss on Realization 10,000

4 Payment to Priority 2
Valdez, Capital 33,333
Pamittan, Capit 16,667
Cash 50,000

5 Payment from Partner's Loan

Cash 30,000
Loan Recievable-Navarro 30,000

5 Absorption of Capital Deficiency

Valdez, Capital 73,333
Pamittan, Capit 36,667
Navarro, Capital 110,000

5 Distribution of Cash to Partners

Valdez, Capital 20,000
Pamittan, Capit 10,000
Cash 30,000
 the liquidation

ilities and Partners' Capital

ounts Payable-Trade P90,000
n Payable-Valdez 60,000
140,000
arro, Capital -70,000
mittan, Capital 80,000
al Liabilities and Capital P300,000

0%; and Pamittan, 20%.

0,000, and all

00, and that

n from the
eive no more
nership's accounting records.

Cash Payments to

Valdez Navarro Pamittan

40,000

280,000 140,000
320,000 140,000

tion
40% 40% 20%
Valdez Navarro Pamittan
200,000 -120,000 80,000 *capital balances + loan balances
-16,000 -16,000 -8,000
184,000 -136,000 72,000

184,000 -136,000 72,000

-40,000
144,000 -136,000 72,000
-13,333 -6,667
130,667 -136,000 65,333
-4,000 -4,000 -2,000
126,667 -140,000 63,333
-33,333 -16,667
93,333 -140,000 46,667
30,000 *loan receivable
93,333 -110,000 46,667
-73,333 110,000 -36,667
20,000 - 10,000
-20,000 -10,000
Problem #22 Installment Liquidation
On Nov. 10,2019, De Guzman, Seechua, and Longalong, partners had capital account
balances of P20,000, P25,000, and P9,000, respectively, and share profits and losses
in a 4:3:1 ratio.
Required:
1. Prepare the cash priority program assuming that liabilities totaled P20,000 on Nov. 10,2019.

De Guzman, Seechua and Longalong

Cash Priority Program
19-Nov

De Guzman Seechua Longalong De Guzman

Partners' Total Interests 20,000 25,000 9,000
Divide profit/loss ratio 57% 29% 14%
Absorption Loss Potential 35,088 86,207 64,286
Priority I: To Seechua -21,921
Balances 35,088 64,286 64,286
Priority II: To Seechua and Longalong -29,198 -29,198
35,088 35,088 35,088
Priority III: Any excess of 18,912 be divided based on P/L ratio.

2. If De Guzman received P4,000, how much cash was paid to all partners?

De Guzman Seechua Longalong

Priority I 6,357

Priority II 8,467 4,088

14,825 4,088 18,912
Remainder 4,000 2,035 982 7,018
4,000 16,860 5,070 25,930

3. If De Guzman received P13,000, how much did Longalong get?

De Guzman Seechua Longalong

Priority I 6,357

Priority II 8,467 4,088

14,825 4,088 18,912
Remainder 13,000 6,614 3,193 22,807
 13,000 21,439 7,281 41,719

4. If Seechua received only P11,000 as a result of the liquidation, what was the loss on
realization of the partnership assests (assuming that no partner invested any
additional assets in the partnership)?

Seechua
Priority I 6,357
Priority II 8,467
14,825
Cash received 11,000
Share on loss 3,825
Seechua's share in P/L 29%
Loss on Realization 13,190
Nov. 10,2019.

Assume there is 20,000 liabilities.

Cash Priority Payments to

De GuzmanSeechua Longalong

6,357

8,467 4,088
0 14,825 4,088 18,912