CHAPTER 5

PARTNERSHIP: DISSOLUTION WITH LIQUADATION

EXERCISES AND PROBLEM
5-1
Dizon, Tamala, and Dimalanta who share profit and loss ratio of 2:1:2 decided to
liquidate their partnership on December 31, 2021. Their Statement of Financial
Position is shown below:
Centerpoint Commercial
Statement of Financial Position
As of December 31, 2021
ASSETS LIABILITIES AND PARTNER'S EQUITY
Cash 30,000 Liabilities 49,000
Non-cash 340,000 Dizon, Loan 20,000
Dizon, Capital 95,000
Tamala, Capital 100,000
Dimalanta, Capital 106,000
Total Assets ₱370,000 Total L&PE ₱370,000
Assume: Deficient partners are insolvent and absorbed by the solvent partner.
Prepare Statement of Partnership Liquidatioj in five separate cases abd
corresponding journal entries in recording the liquidation process.
1. Non-cash assets were sold for 350,000
2. Non-cash assets are sold for 200,000
3. Non-cash assets were sold for 90,000
4. Non-cash assets were sold for 60,000
5. Non-cash assets were sold for 40,000
5-2
The partnership of Watin and Veloso has come to an end. Upon their urgent
request, the accountant prepares the Statement of Financial Position as follows:
ASSETS LIABILITIES AND PARTNER'S EQUITY
Cash 20,000 Liablitirs 60,000
Inventories 80,000 Watin, Loan 10,000
Furniture and Fixtures 100,000 Watin, Capital 40,000
Veloso, Capital 90,000
Total Assets ₱200,000 Total L&PE ₱200,000
Non cash assets were realized for ₱85,000. The partners profit abd loss sharing is
6:4 respectively.
Requiered:
1. Prepare Statement of Partnership liquidation assuming:
a. Watin is solvent partner.
b. Wayin is an insolvent partner.
2. Journal entry to record the partnership liquidation under the two assumptions.

5-3
The partnership of Ponzon, Selisana, and Teque in the Cebu Convenience Store in
which the partners share profit on the ratio of 3:3:4 respectively, appeared as
follows:
Cash 45,000 AP 62,000
AR 60,000 Ponzon, Loan 5,000
Est. UA 3,000 57,000 Ponzon, Capital 35,000
Merchandise 70,000 Selisana, Capital 35,000
Teques, Capital 35,000
Total Assets ₱172,000 Total L&PE ₱172,000
On this date, the partnership decided to liquidate their business. In January 2021,
₱50,000 was collected from the custoners' accounts after which the partners have
agreed to write-off the balance including the valuation account by charging their
respective capital accounts.
The merchandise was realized towards thr month end at 75% of its realizable
value. At the end of January 2021 the liquidation process is over.

Required:
1. Prepare Statement of Partnership Liquidation
2. Jiurnal entries needed to complete the entire liquidation process.