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ABCD PARTNERSHIP
STATEMENT OF LIQUIDATION
September 1,2011
Other Accounts Alpha Delta Alpha,Capital Bravo, Capital Charlie, Capital Delta, Capital
Cash Assets Payable Loan Loan 40% 30% 20% 10%
Balances before 40,000 210,000 55,000 15,000 10,000 50,000 45,000 40,000 35,000
realization
a) Sale of
other asset and
division of gain 250,000 210,000 16,000 12,000 8,000 4,000
Balances after sale 290,000 55,000 15,000 10,000 66,000 57,000 48,000 39,000
b) Payment of
liabilities 80,000 55,000 15,000 10,000
Balances after
payment 210,000 66,000 57,000 48,000 39,000
c) Distribution of
cash to partners 210,000 66,000 57,000 48,000 39,000
page 1 of 6
Journal Entries Case 1.
a) Sale and Division of Gain
Cash 250,000
Other Assets 210,000
Alpha, Capital 16,000
Bravo, Capital 12,000
Charlie Capital 8,000
Delta, Capital 4,000
To record the sale and distribution of gain to partners
b) Payment of Liabilities
Accounts payable 55,000
Alpha, Loan 15,000
Delta, Loan 10,000
Cash 80,000
To record the payment of liabilities
page 2 of 6
Case 2.
ABCD PARTNERSHIP
STATEMENT OF LIQUIDATION
September 1,2011
Other Accounts Alpha Delta Alpha,Capital Bravo, Capital Charlie, Capital Delta, Capital
Cash Assets Payable Loan Loan 40% 30% 20% 10%
Balances before 40,000 210,000 55,000 15,000 10,000 50,000 45,000 40,000 35,000
realization
a) Sale of
other asset and
division of loss 80,000 210,000 52,000 39,000 26,000 13,000
Balances after sale 120,000 55,000 15,000 10,000 2,000 6,000 14,000 22,00
b) Payment of
liabilities 80,000 55,000 15,000 10,000
Balances after
payment 40,000 2,000 6,000 14,000 22,000
Balances after
absorption of capital
deficiency of Alpha 40,000 5,000 13,333 21,667
d) Distribution of
cash to partners 40,000 5,000 13,333 21,667
page 3 0f 6
b) Payment of Liabilities
Accounts payable 55,000
Alpha, Loan 15,000
Delta, Loan 10,000
Cash 80,000
To record the payment of liabilities
Case 3.
ABCD PARTNERSHIP
STATEMENT OF LIQUIDATION
September 1- November 30, 2011
Schedule 1.
Cash Distribution Schedule
September 30,2011
Alpha (40%) Bravo (30%) Charlie (20%) Delta (10%)
Capital balance before distribution 43,000 39,750 36,500 33,250
Add: Loan Balances 15,000
Total Partners' Interest 58,000 39,750 36,500 43,250
Restricted Interest: Theoretical loss
of P 162,500 if withheld cash and
remaining assets were lost and not realized 65,000 48,750 32,500 16,250
Balances 7,000 9,000 4,000 27,000
Additional possible loss to charlie and
Delta if Alpha and Bravo could not make
good their capital deficiencies 7,000 9,000 10,667 5,333
Balances 6,667 21,667
Additional possible loss to Delta if
Charlie can't make good his capital deficiency 6,667 6,667
Free Interest: P- P- P- P-
Payment to be applied to loan
Payment to be applied to capital
Schedule 2.
Cash Distribution Schedule
October 31,2011
Alpha (40%) Bravo (30%) Charlie (20%) Delta (10%)
Capital balance before distribution 47,000 42,250 38,500 29,250
Add: Loan Balances 15,000
Total Partners' Interest 62,000 42,250 38,500 29,250
Restricted Interest: Theoretical loss
of P 110,000 if withheld cash and
remaining assets were lost and not realized 44,000 33,000 22,000 11,000
Free Interest: P 18,000 P 9,250 P 16,500 P 18,250
Payment to be applied to loan 15,000
Payment to be applied to capital 3,000 9,250 16,500 18,250