Assets 2016 Asset Book Value

Cash P 200,000 January P 300,000

Other Assets 500,000 February 200,000
Total Assets P 700,000

Liabilities and Owner's Equity

Liabilities P 250,000
Arce, Loan 70,000
Arce, Capital (30%) 200,000
Bernal, Capital (40) 30,000
Conde, Capital (30%) 150,000
Total Liabilities and Owner's Equity P 700,000
Cash Proceeds
P260,000
230,000
 Arce, Bernal, and Conde Partnership
Statement of Liquidation
January to February 2016

Cash Other Assets Liabilities Arce, Loan

Balances before liquidation P 200,000 P 500,000 P 250,000 P 70,000
January - Sale of assets and distribution of loss 260,000 -300,000
Balances P 460,000 P 200,000 P 250,000 P 70,000
Payment of liabilities -250,000 -250,000
Balances P 210,000 P 200,000 - P 70,000
Payment to partners - see schedule -210,000 -70,000
Balances - P 200,000 - -
February - Sale of assets and distribution of gain P 230,000 -200,000
Balances P 230,000 - - -
Payment to partners -230,000 - - -
 Capital
Arce (30%) Bernal (40%) Conde (30%)
P 200,000 P 30,000 P 150,000
-12,000 -16,000 -12,000
P 188,000 P 14,000 P 138,000

P 188,000 P 14,000 P 138,000

-95,000 -45,000
P 93,000 P 14,000 P 93,000
9,000 12,000 9,000
P 102,000 26,000 P 102,000
102,000 -26,000 -102,000
 Arce, Bernal and Conde Partnership
Schedule of Safe Payments
Amounts to be Paid to Partners
31-Jan-16

Arce Bernal Conde

(30%) (40%) (30%)
Capital balances before cash distribution P 188,000 P 14,000 P 138,000
Add Loans 70,000
Total Partner' Interest P 258,000 P 14,000 138,000
Restricted Interest -
Possible loss of P200,000 if nothing is
realized on remaining unsold assets -60,000 -80,000 -60,000
P 198,000 -66,000 P 78,000
Restricted Interest -

Additional possible loss of P 66,000 to

Arce and Conde if Bernal is unable to pay
his possible deficiency, shared in the ration
of 30:30 -33,000 66,000 -33,000
Free interest - safe payments to partners P 165,000 - P 45,000
Payment to apply on:
Loan P 70,000
Capital 95,000 P 45,000
Total Cash Distributions P 165,000 - P 45,000

JOURNALS TO RECORD THE LIQUIDATION

January Cash
Arce, Capital
Bernal, Capital
Conde, Capital
Other Assets
Sale of assets and distribution of loss

Liabilities
Cash
Payment to Liabilities

Arce, Loan
Arce, Capital
Conde, Capital
Cash
Payment to partners
February Cash
Other Assets
Arce, Capital
Bernal, Capital
Conde, Capital
Sale of assets and distribution of gain

Arce, Capital
Bernal, Capital
Conde, Capital
Cash
Final Payment to partners
260,000
12,000
16,000
12,000
300,000

250,000
250,000

70,000
95,000
45,000
210,000
230,000
200,000
9,000
12,000
9,000

102,000
26,000
102,000
230,000
 Payments
Arce Bernal Conde Arce to Bernal Conde
Capital balances before liquidation P 200,000 P 30,000 P 150,000
Add Loans 70,000
Total Partners' Interest P 270,000 P 30,000 P 150,000
Divided by the profit & loss ration 30% 40% 30%
Loss absorption capacity P 900,000 P 75,000 P 500,000
Allocation !:

Cash to Arce reducing loss absorption

balance to an amount reported for
Conde; reduction of P 400,000
requires payment of 30% x P 400,000 -400,000 P 120,000
P 500,000 P 75,000 P 500,000
Allocation II:

Cash to reduce their loss absorption

balances to amount reported for
Bernal; reduction of P 425,000
requires payment as follows:
To Arce, 30% x P 425,000 -425,000 127,500
To Conde, 30% x P 425,000 -425,000 P 127,500
P 75,000 P 75,000 P 75,000 P 247,500 - P 127,500

Further cash distributions are to be

made in the profit and loss ratio
Cash Available
Allocation I Payable to Arce
Allocation II Payable to Arce and
Conde, 30:30