C 2.

If the non-cash assets are sold for P400,000 and both partners agreed to make up for any capital deficits with personal cash contributions, Magallanes eventually will receive cash of a) b) c) d) P0 P100,000 P150,000 P200,000

Computation:
Cash Bal. before Liquidation Sale of non-cash assets and dist. Of losses Balances Payment of Liabities to Outsiders Balances Additional Investments by Baldecir Balance Payments to Partners P 100,000 400,000 P 500,000 (500,000) P0 150,000 P 150,000 (150,000) Non-cash assets 1,000,000 (1,000,000) Liabilities 500,000 500,000 (500,000) (150,000) 150,000 150,000 (150,000) 150,000 Baldecir, Capital 300,000 (450,000) (150,000) Magallanes, Capital 300,000 (150,000) 150,000

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

Computation:
Cash Bal. before Liquidation Sale of non-cash assets and dist. Of losses Balances Payment of Liabities to Outsiders Balances Additional Losses to Magallanes Balance Payments to Partners P 100,000 500,000 P 600,000 (500,000) P 100,000 Non-cash assets 1,000,000 (1,000,000) Liabilities 500,000 500,000 (500,000) (75,000) 75,000 P 100,000 (100,000) 175,000 (75,000) 100,000 (100,000) Baldecir, Capital 300,000 (375,000) (75,000) Magallanes, Capital 300,000 (125,000) 175,000

Multiple Choice Partners Biore and Selisana each have a P450,000 capital balance and share profits and losses in a 3:2 ratio, respectively. Cash equals P150,000, non-cash assets equal P1,500,000 and liabilities equal P750,000. C 1.If the non-cash assets are sold for P1,000,000, the change in Selisanas capital account will be a) b) c) d) an increase of P500,000 a decrease of P250,000 a decrease of P200,000 an increase of P400,000

Computation:
Cash Bal. before Liquidation Sale of non-cash assets and dist. Of losses Balances Payment of Liabities to Outsiders Balances Payments to Partners P 150,000 1,000,000 P 1,500,000 (750,000) P 400,000 (400,000) Non-cash assets 1,500,000 (1,500,000) Liabilities 750,000 750,000 (750,000) 150,000 (150,000) 250,000 (250,000) Biore, Capital 450,000 (300,000) 150,000 Selisana, Capital 450,000 (200,000) 250,000

A 2. If the non-cash assets are sold for P700,000 and each partner is personally insolvent, upon liquidation Selisana will receive a cash distribution of a) b) c) d) P100,000 P50,000 P130,000 P0

Computation:
Cash Bal. before Liquidation Sale of non-cash assets and dist. Of losses Balances Payment of Liabities to Outsiders Balances Addl Losses to Selisana Balances Payments to Partners P 150,000 700,000 P 850,000 (750,000) P 100,000 Non-cash assets 1,500,000 (1,500,000) Liabilities 750,000 750,000 (750,000) (30,000) 30,000 P 100,000 (100,000) 130,000 (30,000) 100,000 (100,000) Biore, Capital 450,000 (480,000) (30,000) Selisana, Capital 450,000 (320,000) 130,000

C 3. If the non-cash assets are sold for P700,000 and both partners agree to make up for any capital deficits with personal cash contributions, upon liquidation Selisana will receive a cash distribution of a) b) c) d) P100,000 P50,000 P130,000 P0

Computation:
Cash Bal. before Liquidation Sale of non-cash assets and dist. Of losses Balances Payment of Liabities to Outsiders Balances Additional Investment of Biore Balances Payments to Partners P 150,000 700,000 P 850,000 (750,000) P 100,000 30,000 P 130,000 (130,000) Non-cash assets 1,500,000 (1,500,000) Liabilities 750,000 750,000 (750,000) (30,000) 30,000 130,000 (130,000) 130,000 Biore, Capital 450,000 (480,000) (30,000) Selisana, Capital 450,000 (320,000) 130,000

Multiple Choice D 1. Matias, Pagayanon and Pescasiosa, partners sharing profits and losses based on 4:4:2 decided to liquidate. All assets of the partnership were liquidated. The condensed statement of financial position just prior to liquidation follows:
Assets Cash Other Cash P100,000 400,000 Liabilities and Capital Liabilities Matias, Loan Matias, Capital Pagayanon, Capital Pescasiosa, Capital Total P140,000 10,000 45,000 105,000 200,000 P500,000

Total

__________ P500,000

Other assets were sold for P247,500 realizing a loss of P152,500. Parties agreed to fully terminate the partnerships business thus, necessitating distribution of cash to partners and in case of capital deficiency, contribution of additional cash. The three partners were all solvent and could answer any capital deficiency. Name the partner and give the corresponding additional cash he had to invest due to his capital deficiency to finally settle the liquidation of the partnership. a) b) c) d) Pagayanon, P44,000 Pescasiosa, P30,500 Matias, P16,000 Matias, P6,000

Computation:
Cash Bal. before P100,000 Liquidation Sale of other assets and 247,500 dist. of losses Balances P347,000 Payment of Liabities to (140,000) Outsiders Balances P207,500 Right of offset by Matias Balances P207,500 Additional Investment by 6,000 Matias Balances P213,500 Payments to (213,500) Partners Other assets 400,000 (400,000) 140,000 (140,000) 10,000 (10,000) (16,000) 10,000 (6,000) 6,000 44,000 (44,000) 169,500 (169,500) 44,000 169,500 44,000 169,500 10,000 Liabilities 140,000 Matias, Loan 10,000 Matias, Capital 45,000 (61,000) (16,000) Pagayanon, Capital 105,000 (61,000) 44,000 Pescasiosa, Capital 200,000 (30,500) 169,500

C 2. Partners Gumban, Danlag and Escriba who shared profits and losses based on 4:4:2 decided to liquidate. All assets of the partnership were liquidated. The condensed statement of financial position just prior to liquidation follows:
Assets Cash Other Cash P100,000 400,000 Liabilities and Capital Liabilities Gumban, Loan Gumban, Capital Danlag, Capital Escriba, Capital Total P140,000 10,000 45,000 105,000 200,000 P500,000

Total

__________ P500,000

Other assets were sold for P247,500 realizing a loss of P152,500. Parties agreed to fully terminate the partnerships business thus, necessitating distribution of cash to partners and in case of capital deficiency, contribution of additional cash. The three partners were all solvent and could answer any capital deficiency. The realization of assets, distribution of loss and payment of liabilities resulted to the following partners loan and capital accounts balances prior to final cash settlement:
Gumban, Loan Gumban, Capital Danlag, Capital Escriba, Capital

a) b) c) d)

P10,000 P10,000 P10,000 P10,000

P10,000 15,000 (16,000) 45,000

P50,000 55,000 44,000 105,000

P165,000 165,000 160,500 200,000

Computation:
Cash Bal. before Liquidation Sale of other P100,000 247,500 Other assets 400,000 (400,000) Liabilities 140,000 Gumban, Loan 10,000 Gumban, Capital 45,000 (61,000) Danlag, Capital 105,000 (61,000) Escriba, Capital 200,000 (30,500)

assets and dist. of losses Balances P347,000 Payment of Liabities to (140,000) Outsiders Balances P207,500 Right of offset by Matias Balances P207,500 Additional Investment by 6,000 Matias Balances P213,500 Payments to (213,500) Partners

140,000 (140,000)

10,000

(16,000)

44,000

169,500

10,000 (10,000)

(16,000) 10,000 (6,000) 6,000

44,000

169,500

44,000

169,500

44,000 (44,000)

169,500 (169,500)