Problem

4 – 1
Case 1
Rivas and Briones Partnership
Statement of Liquidation
December 31, 2016
Cash Other Assets Liabiliities Rivas, Loan Briones, Loan Rivas, capital Briones, capital
Beginning balance 20,000.00 200,000.00 132,000.00 18,000.00 20,000.00 40,000.00 10,000.00
Sale of non-cash assets 134,000.00 (200,000.00) (59,400.00) (6,600.00)
Balance 154,000.00 - 132,000.00 18,000.00 20,000.00 (19,400.00) 3,400.00
Payment of liabilities (132,000.00) (132,000.00)
Balance 22,000.00 - - 18,000.00 20,000.00 (19,400.00) 3,400.00
Offset loan against capital deficiency - - - (18,000.00) - 18,000.00 -
Balance 22,000.00 - - - 20,000.00 (1,400.00) 3,400.00
Additional loss to Briones - - - - - 1,400.00 (1,400.00)
Balance 22,000.00 - - - 20,000.00 - 2,000.00
Payment to partners (22,000.00) (20,000.00) (2,000.00)


Journal Entries

Cash .......... .................................................................................................... 134,000
Rivas, Capital ................................................................................................ 59,400
Briones, Capital ............................................................................................ 6,600
Other Assets ........................................................................................... 200,000

Liabilities .. .................................................................................................... 132,000

Cash .. .................................................................................................... 132,000

Rivas, Loan .................................................................................................... 18,000

Rivas, Capital ......................................................................................... 18,000

Briones, Capital ............................................................................................ 1,400

Rivas, Capital ......................................................................................... 1,400

Briones, Loan ................................................................................................ 20,000

Briones, Capital ............................................................................................ 2,000
Cash .................................................................................................... 22,000

Problem 4 – 1
Case 2
Rivas and Briones Partnership
Statement of Liquidation
December 31, 2016
Cash Other Assets Liabiliities Rivas, Loan Briones, Loan Rivas, capital Briones, capital
Beginning balance
20,000.00
200,000.00
132,000.00
18,000.00
20,000.00
40,000.00
10,000.00
Sale of noncash assets
134,000.00
(200,000.00)
-
-
-
(46,200.00)
(19,800.00)
Balance
154,000.00
-
132,000.00
18,000.00
20,000.00
(6,200.00)
(9,800.00)
Payment of liabilities
(132,000.00)
-
(132,000.00)
-
-
-
-
Balance
22,000.00
-
-
18,000.00
20,000.00
(6,200.00)
(9,800.00)
Offset loan against deficiency
-
-
-
(6,200.00)
(9,800.00)
6,200.00
9,800.00
Balance
22,000.00
-
-
11,800.00
10,200.00
-
-
Payment to partners
(22,000.00)
-
-
(11,800.00)
(10,200.00)
-
-

Journal Entries:
Cash .......... .................................................................................................... 134,000
Rivas, Capital ................................................................................................ 46,200
Briones, Capital ............................................................................................ 19,800
Other Assets ........................................................................................... 200,000

Liabilities .. .................................................................................................... 132,000

Cash .. .................................................................................................... 132,000

Rivas, Loan .................................................................................................... 6,200

Briones, Loan ................................................................................................ 9,800
Rivas, Capital ......................................................................................... 6,200
Briones, Capital ..................................................................................... 9,800

Rivas, Loan .................................................................................................... 11,800

Briones, Loan ................................................................................................ 10,200
Cash .. .................................................................................................... 22,000





Problem 4 – 1
Case 3
Rivas and Briones Partnership
Statement of Liquidation
December 31, 2016
Cash Other Assets Liabiliities Rivas, Loan Briones, Loan Rivas, capital Briones, capital
Beginning balance 20,000.00 200,000.00 132,000.00 18,000.00 20,000.00 40,000.00 10,000.00
Sale of other assets 134,000.00 (200,000.00) - - - (33,000.00) (33,000.00)
Balance 154,000.00 - 132,000.00 18,000.00 20,000.00 7,000.00 (23,000.00)
Payment of liabilities (132,000.00) - (132,000.00) - - - -
Balance 22,000.00 - - 18,000.00 20,000.00 7,000.00 (23,000.00)
Offsetting of loan against capital deficiency - - - - (20,000.00) - 20,000.00
Balance 22,000.00 - - 18,000.00 - 7,000.00 (3,000.00)
Additional loss to Rivas - - - - - (3,000.00) 3,000.00
Balance 22,000.00 - - 18,000.00 - 4,000.00 -
Payment to Rivas (22,000.00) - - (18,000.00) - - -


Cash.... .... .......................................................................................... 134,000
Rivas, Capital ..................................................................................... 33,000
Briones, Capital ................................................................................. 33,000
Other Assets ................................................................................. 200,000

Liabilities. .......................................................................................... 132,000

Cash .. .......................................................................................... 132,000

Briones, Loan ..................................................................................... 20,000

Briones, Capital ........................................................................... 20,000

Rivas, Capital ..................................................................................... 3,000

Briones, Capital ........................................................................... 3,000

Rivas, Loan ......................................................................................... 18,000

Rivas, Capital ..................................................................................... 4,000
Cash .. .......................................................................................... 22,000
Problem 5-1
STU Partnership
Statement of Partnership Liquidation
January 1 to April 30, 2017
Cash Other Assets Liabilities Tulio, Loan Umali, Loan Suarez, capital Tulio, capital Umali, capital
January:
Beginning balance 2,000.00 46,000.00 6,000.00 5,000.00 2,500.00 14,450.00 12,550.00 7,500.00
Sale of non-cash assets 10,500.00 (12,000.00) (600.00) (525.00) (375.00)
Liquidation expenses (500.00) (200.00) (175.00) (125.00)
Payment of liabilities (6,000.00) - (6,000.00) - - - - -
Balance before payment to partners 6,000.00 34,000.00 - 5,000.00 2,500.00 13,650.00 11,850.00 7,000.00
Payment to partners (4,000.00) - - (3,812.50) (187.50) - - -
Balances 2,000.00 34,000.00 - 1,187.50 2,312.50 13,650.00 11,850.00 7,000.00
February
Sale of non-cash assets 6,000.00 (7,000.00) (400.00) (350.00) (250.00)
Liquidation expenses (750.00) - - - - (300.00) (262.50) (187.50)
Balance before payment to partners 7,250.00 27,000.00 - 1,187.50 2,312.50 12,950.00 11,237.50 6,562.50
Payment to partners (Schedule) (6,000.00) - - (1,187.50) (1,812.50) (1,650.00) (1,350.00) -
Balance 1,250.00 27,000.00 - - 500.00 11,300.00 9,887.50 6,562.50
March
Sale of non-cash assets 10,000.00 (15,000.00) (2,000.00) (1,750.00) (1,250.00)
Liquidation expenses (600.00) (240.00) (210.00) (150.00)
Balance before payment to partners 10,650.00 12,000.00 - - 500.00 9,060.00 7,927.50 5,162.50
Payment to partners (P&L) (10,150.00) - - - (500.00) (4,060.00) (3,552.50) (2,037.50)
Balance 500.00 12,000.00 - - - 5,000.00 4,375.00 3,125.00
April
Sale of non-cash assets 4,000.00 (12,000.00) (3,200.00) (2,800.00) (2,000.00)
Liquidation expenses (400.00) - - - - (160.00) (140.00) (100.00)
Balance before payment to partners 4,100.00 - - - - 1,640.00 1,435.00 1,025.00
Payment to partners (P&L) (4,100.00) - - - - (1,640.00) (1,435.00) (1,025.00)







 Schedule of Safe Payments - January
Suarez (40%) Tulio (35%) Umali (25%)
Capital balance before payment to partners
13,650.00
11,850.00
7,000.00
Add (Deduct): Loan
-
5,000.00
2,500.00
Total Interest
13,650.00
16,850.00
9,500.00
Less: Possible loss (cash withheld and unsold NCA)

36,000.00
14,400.00
12,600.00
9,000.00
Balance
(750.00)
4,250.00
500.00
Additional loss to Tulio and Umali
750.00
(437.50)
(312.50)
Payment to partners
-
3,812.50
187.50
Applied to loan
(3,812.50)

(187.50)
Applied to capital
-
-
-

Schedule of Safe Payments - February

Suarez (40%) Tulio (35%) Umali (25%)
Capital balance before payment to partners 12,950.00
11,237.50
6,562.50
Add (Deduct) Loan:
-
1,187.50
2,312.50
Total Interests
12,950.00
12,425.00
8,875.00
Possible loss

(28,250.00)
(11,300.00)
(9,887.50)
(7,062.50)
Payment to partners
1,650.00
2,537.50
1,812.50
Applied to loan
-
(1,187.50)
(1,812.50)
Applied to capital
(1,650.00)
(1,350.00)

Payment to partners
4,060.00
3,552.50
2,537.50
Applied to loan
(500.00)
Applied to capital
(4,060.00)
(3,552.50)
(2,037.50)





STU Partnership
Cash Distribution Program

Suarez Tulio Umali Cash Payments Total

Suarez (40%) Tulio (35%) Umali (25%)
Capital
14,450.00
12,550.00
7,500.00
Add (Deduct) Loan:
-
5,000.00
2,500.00
Total Interest
14,450.00
17,550.00
10,000.00
Divide by Profit and loss ratio
0.40
0.35
0.25
Loss Absorption Balance
36,125.00
50,142.86
40,000.00
Priority 1 to Tulio (50,142.86-40,000)
-
(10,142.86)
-
3,550.00
3,550.00
Balance
36,125.00
40,000.00
40,000.00
Priority 2 to Tulio and Umali
-
(3,875.00)

(3,875.00)
1,356.25
968.75
2,325.00
Balance
36,125.00
36,125.00
36,125.00
-
-
-
-
Total
-
4,906.25
968.75
5,875.00

January: Suarez Tulio Umali

Cash available for distribution
4,000.00
Priority 1 to Tulito
3,550.00
3,550.00
Priority 2 to Tulio and Umali
450.00
-
262.50
187.50
Payment to partners
-
3,812.50
187.50

February
Cash available
6,000.00
Priority 2 to Tulio and Umali (2,325-450)
1,875.00
1,093.75
781.25
Balance (P&L)
4,125.00
1,650.00
1,443.75
1,031.25
Payment to partners
1,650.00
2,537.50
1,812.50
Multiple Choice 5-5 to 5-6
Tan Lim Wan
Capital
40,000.00
65,000.00
48,000.00
Add (Deduct) Loan:
-
-
-
Total interest
40,000.00
65,000.00
48,000.00
Loss on sale of non-cash assets (50000-90000)
(16,000.00)
(16,000.00)
(8,000.00)
Balance
24,000.00
49,000.00
40,000.00
Possible loss (180,000-90,000)
(36,000.00)
(36,000.00)
(18,000.00)
Balance
(12,000.00)
13,000.00
22,000.00
Additional loss to Lim and Wan
12,000.00
(8,000.00)
(4,000.00)
Payment to partners
-
5,000.00
18,000.00

Tan Lim Wan

Capital
40,000.00
65,000.00
48,000.00
Add (Deduct) Loan:
-
-
-
Total interest
40,000.00
65,000.00
48,000.00
Loss on sale of non-cash assets (50000-90000)
(16,000.00)
(16,000.00)
(8,000.00)
Balance
24,000.00
49,000.00
40,000.00
Possible loss (180,000-90,000)+3000
(37,200.00)
(37,200.00)
(18,600.00)
Balance
(13,200.00)
11,800.00
21,400.00
Additional loss to Lim and Wan
13,200.00
(8,800.00)
(4,400.00)
Payment to partners
-
3,000.00
17,000.00

Multiple Choice 5-6

Tan (14,000*.40)
5,600.00
Lim (14,000*.4)
5,600.00
Wan (14,000*.2)
2,800.00