Cash 800,000

Accounts Receivable (2,400,000 x 88%) 2,112,000

Merchandise Inventory 4,800,000
Equipment Overvaluation (7,200,000 - 600,000) 6,600,000
Prepaid Expenses 275,000
Adjusted Assets of Sarah 14,587,000
Accounts Payable 3,000,000
Notes Payable 5,000,000
Accrued Expenses 125,000 8,125,000
[1] Adjusted Capital of Sarah 6,462,000
Sarah - interest (divide) 75%
Total Capital of Partnership 8,616,000 (4,800,000 - 4,000
Matteo - interest (multiply) 25%
[2] Cash investment of Matteo 2,154,000
Cash in the books of Sarah 800,000
[3] Total Cash of the Partnership 2,954,000

Adjusted Assets of Sarah 14,587,000

Cash investment of Matteo 2,154,000
[4] Total Assets of the Partnership 16,741,000

[5] Total Liab of the Partnership 8,125,000

 adj
Sarah Capital (2,400,000 x 12%) 288,000
Uncollectible Account 288,000
Investment (4,800,000 - 800,000) 800,000
Sarah Capital 800,000 Net Adjustment
Sarah Capital 600,000 (800-288+275-600-125) =62,000
Equipment 600,000 Net Increase
Prepaid Expense 275,000
Accrued Expenses 125,000
Sarah Capital 150,000
Shortcut
(-2,400,000 x 12% ) +
(4,800,000 - 4,000,000)-
600,000 +275,000 - 125,000
=62,000 Net Increase/Net Credit

Total capital Balance (16,741,000 - 8,125,000)

Total Agreed Capital 8,616,000
Agreed Capital Sarah (8,616,000 / 2) Less 4,308,000 Agreed Capital Mateo
Adjusted capital 6,462,000 Adjusted capital Less
Withdraw 2,154,000 Invest
/ Net Credit

4,308,000
2,154,000
2,154,000
 MAR182 MAR186
Cash 1,800,000 600,000 Interest
Accounts Receivable 1,900,000 1,140,000 Salaries
Merchandise Inventory 4,800,000 1,920,000 Bonus
Equipment 4,200,000 2,750,000 Remainder
Prepaid Expenses 460,000 200,000 Share in Net Income
Adjusted Assets 13,160,000 6,610,000
Net Income
Accounts Payable 6,000,000 3,780,000 Interest
Accrued Expenses 30,000 10,000 Salaries
Adjusted Liabilities 6,030,000 3,790,000 Basis of Bonus
Bonus %
Adjusted Capital 7,130,000 2,820,000 Bonus to MAR186
Comp. of Ave. Cap. 4/30 160,000 - 240,000
6/1 - 490,000 - 122,500 Summary of Answers:
8/31 200,000 160,000 1
10/1 37,500 75,000 2
Ave. Cap. 7,037,500 2,692,500 3
4
MAR182 MAR186 5
Beginning Capital 7,130,000 2,820,000 6
Inv/With 4/30 240,000 - 360,000 7
6/1 - 840,000 - 210,000 8
8/31 600,000 480,000 9
10/1 150,000 300,000 10
Share in Net Income 1,132,580 667,420
Ending Capital, adjusted 8,412,580 3,697,420
 70% 30%
MAR182 MAR186 Total
351,875 134,625 486,500
180,000 180,000 360,000
95,350 95,350
Remainder 600,705 257,445 858,150
Share in Net Income 1,132,580 667,420 1,800,000

Net Income 1,800,000

- 486,500
- 360,000
Basis of Bonus 953,500
10%
Bonus to MAR186 95,350

Summary of Answers:
MAR182 Capital Credit 7,130,000
MAR186 Capital Credit 2,820,000
Total Assets of the Partnership 19,770,000
Net adjustments - MAR186 - 780,000 debit (adjusted capital less unadjusted)
Average Capital MAR 182 7,037,500
Bonus to MAR186 95,350
Share of MAR182 1,132,580
Share of MAR186 667,420
Ending capital of MAR182 8,412,580
Ending capital of MAR186 3,697,420
 50% 50%
Evie Leo Total
Salaries 300,000 180,000 480,000
Interest 30,000 30,000 60,000
*Bonus -
Remainder - 132,500 - 132,500 - 265,000
Share in Net Income 197,500 77,500 275,000

*No bonus is given to Evie since amount NI after salaries and interest results to a negative amount.
 Ann Win
Beginning Capital 40,000 32,000
Additional Investment 40,000 30,000
Withdrawals - 10,000 - 2,000
Capital before Net Income 70,000 60,000
Basis of Allocating Remainder 7/13 6/13

Ann Win
Bonus (10% of NI) 6,000
Interest 4,000 3,200
Remainder 46,800 * 7 / 13 = 25,200 46,800 * 6 / 13 = 21,600
Share in Net Income 35,200 24,800

Capital before Net Income 70,000 60,000

Share in Net Income 35,200 24,800
Adjusted Ending capital 105,200 84,800
 130,000

Total
6,000
7,200
60,000-6,000-7,200= 46,800
60,000
 Marvin
Beginning Capital 200,000
10/1 investment 600,000 x 3/6 = 30,000
12/1 investment
Average Capital 230,000

Marvin
Salaries divide by 2 30,000
Interest 230,000 x 10% x6/12 = 11,500 300,000 x 10% x 6/12 =
Bonus 10,000
Remainder 30,000
Share in NI 81,500

Equation 1
B = 10% (NI - S - I)
B = 10%(NI - 121,250)
B = 0.1NI - 12,125
0.1NI = B + 12,125
(0.1NI = B + 12,125) x 10
NI = 10B + 121,250

B = 0.1NI - 12,125
0.1 0.1
B = NI - 211,250
0= -0.9NI + 199,125
0.9NI= 199,125
0.9 0.9
NI= 221,250
 Jerwin Grace
300,000 450,000

30,000 x 1/6 = 5,000

300,000 455,000

Jerwin Grace Total Beginning Capital

24,000 18,000 72,000 10/1 investment
15,000 455,000x10% x 6/12 = 22,750 49,250 12/1 investment
10,000 Share in Net Income
30,000 30,000 90,000 Ending Capital
69,000 70,750 221,250

Equation 2
NI = S + I + B + R
NI = B + 211,250

Elimination: NI = 10B + 121,250

Equation 1 (NI = B + 211,250)
Equation 2 0 = 9B - 90,000
9B = 90,000
B = 10,000
 Marvin Jerwin Grace
200,000 300,000 450,000
60,000
30,000
Net Income 81,500 69,000 70,750
341,500 369,000 550,750
 Peter Charlie
Beginning Capital 240,000 480,000
Share in Profit 54,300 108,600
Withdrawal - 50,500 - 80,000
Ending Capital 243,800 508,600

Peter (1) Charlie (2) Total

1/4 interest 60,950 127,150 188,100
Excess 37,300 74,600 111,900
Cash received 98,250 201,750 300,000
Allowance - 9,000
Inventory (inc. in FV) 10,000
Equipment (inc. in FV) 20,000
Acrrued Expense - 8,000
Net Adjustments 13,000

Annie (6) Bethy (4) Total

Beginning Capital 266,000 216,000 482,000
Adjustments 7,800 5,200 13,000
Total 273,800 221,200 495,000
Old Partners' Interest 80%
Total Agreed Capital 618,750
Cathy's Interest 20%
Investment of Cathy 123,750
Annie (6) Bethy (4)
Capital before admission 273,800 221,200
Agreed Capital 309,375 185,625
Settlement - 35,575 35,575
Bethy will pay Annie 35,575.
Other Assets 534,400
AR - T 24,000
Cash 28,000
Total Assets 586,400
Loan - C - 9,600
Loan - A - 28,800
A, Capital - 118,800
T, Capital - 88,800
C, Capital - 78,000
Liabilities 262,400

Cash 28,000
Proceeds (70%) 374,080
Liabilities - 262,400
Liq. Exp. - 12,000
Cash distributed 127,680
 Proceeds Loss on
Realization of Assets
1st Month 2nd Month Realization Capital balances
Current Assets (420 - 60 = 360) Loans +/-
360,000 x 65% = 234,000 163,800 70,200 Total Interest
360,000 x 35% = 126,000 106,000 20,000 PnL
Noncurrent Assets 990,000 Loss Absorption Bal.
990,000 x 50% = 495,000 400,000 95,000 Difference
990,000 x 10% = 99,000 - 29,000
990,000 x 40% = 396,000 316,800 79,200
Total 563,800 422,800 293,400 [1]
Cash, beg 60,000
Liabilities - 470,000
Liq. Exp. - 15,000
Cash withheld - 8,000
Payment to partners 130,800 [2]
 Tanny - 50 Louie - 30 Corrie - 20
Capital balances 400,000 400,000 265,000
- 120,000 70,000 - 75,000
Total Interest 280,000 470,000 190,000
50% 30% 20%
Loss Absorption Bal. 560,000 1,566,667 950,000 Tanny - 50 Louie - 30 Corrie - 20
Difference 616,667 185,000
[3] P130,800 must be given to Louie.
 Total
185,000
 Julia Kristine James
Balances 50,000 96,000 74,000
Loans - 10,000 30,000
Total Interest 40,000 96,000 104,000
PnL 33% 33% 33%
Loss Absorption Balance 120,000 288,000 312,000
Difference 24,000
Balances 120,000 288,000 288,000
Difference 168,000 168,000
Balances 120,000 120,000 120,000
*at this point, after distributing the first P120,000, all available cash will be distri
Cash Distributed 140,000
Total Cash - CPP - 120,000
Balance 20,000
Julia - PnL 33%
Cash received by Julia 6,667

Julia, Interest 40,000 Cash Available

Kristine, Interest 96,000 Liq. Exp. Paid
James, Interest 104,000 Liabilities paid
Liabilities 90,000 Cash balance
Total Assets 330,000 Proceeds from sale of NCA
Cash - 5,000
BV of Assets 325,000
Proceeds from sale of NCA - 231,000
Balance 94,000 the amount represents the total loss on the 1st sale and BV of un
Liquidation expenses 6,000
Total Loss 100,000
Julia PnL 33%
Balance 33,333
Julia, Interest 40,000
Cash paid to Julia 6,667 this is the amount safe to be paid to Julia
 Cash Distribution
Julia Kristine James Total
### 8,000

### ### 112,000

Total 120,000
120,000, all available cash will be distributed equally.

###
###
###
###
###

e total loss on the 1st sale and BV of unsold noncash assets

be paid to Julia
Sanjoe, Capital 132,000
Other Assets BV 357,000
Proceeds 192,000
Loss on Realization 165,000
Sanjoe Share in LOR 50% - 82,500
Share in Liq. Exp. (6,000 x 50%) - 3,000
Balance 46,500
Cash received by Sanjoe 37,500
Share of Sanjoe in Cash Withheld 9,000
PnL of Sanjoe 50%
Cash withheld for future expenses 18,000
Cash 315,000 Lawrence - 50 Mary Joy - 25
Noncash Assets 2,100,000 Total Interest 360,000 240,000
Lawrence Cap., net - 360,000 PnL 50% 25%
Mary Joy Cap., net - 240,000 Loss Absorption Bal. 720,000 960,000
Nathaniel Cap., net - 330,000 Difference
Liabilities 1,485,000 Balance 720,000 960,000
Difference 240,000
Cash 315,000 Balance 720,000 720,000
Proceeds 1,360,000
Liabilities - 1,485,000
Liquidation expenses - 10,000
Payment to partners - 160,000
Cash withheld 20,000
BV of unsold 630,000
Total restricted int. 650,000
Nathaniel - 25
330,000
25%
1,320,000 Lawrence - 50 Mary Joy - 25 Nathaniel - 25 Total
360,000 90,000 90,000
960,000 -
240,000 60,000 60,000 120,000
720,000 - 60,000 150,000 210,000

[3] The payment of P160,000 will be allocated to the partners as follows:

Lawrence MJ Nathaniel
First 90,000 90,000
Excess equally to MJ and Nath
160,000 - 90,000 - 35,000 35,000
Total - 35,000 125,000
 Lachica Ardales Basco
Capital Balance 180,000 120,000 60,000
Loan - Ardales - 20,000 40,000
Total Interest 180,000 100,000 100,000
PnL 30% 50% 20% Cash Distribution
LAB 600,000 200,000 500,000 Lachica
Difference 100,000 30,000
Balance 500,000 200,000 500,000
Difference 300,000 300,000 90,000
Balance 200,000 200,000 200,000
*at this point, after distributing the first P180,000, all available cash will be distributed
18,000
[1] First P30,000 to Lachica, answer is P10,000. Total 138,000
[2] Total Cash received by Ardales 72,000
 Cash Distribution
Ardales Basco Total
30,000

60,000 150,000
180,000
available cash will be distributed equally.
30,000 12,000 60,000
30,000 72,000 240,000
 Cayan, Balance 1,900,000
Loans - 150,000
Share in Net Income 1,028,000
Cayan, Interest 2,778,000
Share in LOR - 18,450
Share in liq.exp - 70,000
Amount received - 555,550
Share in future liq.exp. - 36,000
Share in BV of unsold 2,098,000
PnL 40%
BV of unsold assets 5,245,000
BV of noncash assets 7,375,000
[1] BV of sold assets 2,130,000

Soler Capital 1,250,000

Loans - 20,000 Capital balance
Share in Net Income 1,028,000 Loans to/from
Soler, Interest 2,258,000 Unallocated NI (4,800-2,230)
Share in LOR - 18,450 Total Interest
Share in liq.exp - 70,000 PnL
Share in future liq.exp. - 36,000 Loss Absorption Balance
Share in BV of unsold - 2,098,000 Difference
Amount received by Soler 35,550 Balance
Difference
Balance
 Soler 40% Cayan 40% Andres 20%
1,250,000 1,900,000 1,000,000
- 20,000 - 150,000 50,000
1,028,000 1,028,000 514,000
2,258,000 2,778,000 1,564,000 Soler 40% Cayan 40% Andres 20%
40% 40% 20%
5,645,000 6,945,000 7,820,000
875,000 175,000
5,645,000 6,945,000 6,945,000
1,300,000 1,300,000 520,000 260,000
5,645,000 5,645,000 5,645,000 35,550 35,550 17,775
35,550 555,550 452,775
Total

175,000

780,000
88,875
1,043,875
M, Capital 275,000
Share in LOR (46,250 x 50%) - 23,125
Share in Liq. Exp. (12,500 x 50%) - 6,250
Balance 245,625
Sh in the BV of unsold (743,650 x 40% x 50%) - 148,750
Cash received by M - 78,125
Share of M in Cash Withheld 18,750
PnL of M 50%
Cash withheld for future expenses 37,500
 25% 25% 50%
Yeng Rachelle Sarah Total
Interest 50,000 75,000 100,000 225,000
Salaries 45,000 50,000 96,000 191,000
Bonus 233,200 233,200
Remainder 129,200 129,200 258,400 516,800
Share in NI 457,400 254,200 454,400 1,166,000

Reported Net Income 750,000

Add back: Salaries 191,000
Interest 225,000
Net Income to be Allocated 1,166,000
 AC CC Difference
Old (75) 1,230,000 1,200,000 30,000
New (25) 410,000 440,000 - 30,000
Total 1,640,000 1,640,000 -

Bonus to Glenn 9,000

PnL of Glenn 30%
Total Bonus to Old 30,000
 AC CC Difference
Old (55) 118,250 100,000 18,250
New (45) 96,750 115,000 - 18,250
Total 215,000 215,000 -

Total Contributed by Old 115,000

Cash contributed by C - 55,000
Cash contributed by D - 10,000
Equipment contributed by D 50,000
 40% 20%
Cash Other Assets Liabilities Esmer Estrel
Balances 90,000 400,000 265,000 50,000 50,000
Proceeds/(LOR) 120,000 - 400,000 - 112,000 - 56,000
Elmer, loan
Total 210,000 - 265,000 - 62,000 - 6,000
Absorb Deficiency - 3,000 6,000
Total 210,000 265,000 - 65,000 -
Cash Investment 72,500 65,000
Payment of Liab. - 265,000 - 265,000
Total 17,500 - - - -
Cash to Elmer - 17,500
Balance - - - - -

Partner Assets Liabilities Solv/Insolv +Cash/-Inv. Rem. Assets

Esmer 250,000 150,000 100,000 - 65,000 35,000
Estrel 100,000 150,000 insolvent
Ellea 150,000 125,000 25,000 - 7,500 17,500
Elmer 200,000 250,000 insolvent 17,500 217,500

1. The amount to be paid to personal creditors of Esmer 150,000

2. The amount to be paid to personal creditors of Estrel 100,000
3. The amount to be paid to personal creditors of Elmer 217,500
 20% 20%
Ellea Elmer
50,000 50,000
- 56,000 - 56,000
25,000
- 6,000 19,000
- 1,500 - 1,500
- 7,500 17,500
7,500

- 17,500
- 17,500
- -