Date

Wednesday, September 29, 2021

Monday, October 04, 2021

Wednesday, October 06, 2021

Monday, October 11, 2021

Wednesday, October 13, 2021

 Activity Remarks
Discussion - Partnership Liquidation -
5 items MCQ Theories - Dissolution
5 items MCQ Theories - Liquidation
Quiz 3
5 items MCQ Problems - Dissolution
15 items MCQ Problems - Liquidation
Discussion - Corporate Liquidation -
N/A - Holiday -
10 items - Theories
Quiz 4: Corporate Liquidation 10 items - MCQ Problems
Lump Sum Liquidation

Assets
Cash 20,000.00
Other Assets 80,000.00
100,000.00

Liabilities and Capital

Liabilities 28,000.00
D, loan 2,000.00
D, Capital (40%) 9,000.00
E, Capital (40%) 21,000.00
F, Capital (20%) 40,000.00
100,000.00
Loss on Realization: Fully absorbed by Partners' capital balances
Assume that Other Assets, were realized at P60,000 thus resulting to a loss. Hence, the distribution

Statement of Liquidation
Cash Other Assets
Balance before liquidation 20,000.00 80,000.00
Realization of assets and distribution of loss 60,000.00 (80,000.00)
Balances 80,000.00 -
Payment of Liabilities (28,000.00)
Balances 52,000.00 -
Payment to Partners (52,000.00)
- -

Cash 60,000
D, Capital 8,000
E, Capital 8,000
F, Capital 8,000
Other Assets

Liabilities 28,000
Cash

D Loan 2,000
D, Capital 1,000
E, Capital 13,000
F, Capital 36,000
Cash
nce, the distribution of cash to the partners does not present any problem.

Liabilities D, Loan Partner D Partner E

28,000.00 2,000.00 9,000.00 21,000.00
(8,000.00) (8,000.00)
28,000.00 2,000.00 1,000.00 13,000.00
(28,000.00)
- 2,000.00 1,000.00 13,000.00
(2,000.00) (1,000.00) (13,000.00)
- - - -

80,000

28,000

52,000
Partner F
40,000.00
(4,000.00)
36,000.00

36,000.00
(36,000.00)
-
Lump Sum Liquidation

Assets
Cash 20,000.00
Other Assets 80,000.00
100,000.00

Liabilities and Capital

Liabilities 28,000.00
D, loan 2,000.00
D, Capital (40%) 9,000.00
E, Capital (40%) 21,000.00
F, Capital (20%) 40,000.00
100,000.00
Loss on realization resulting capital deficiency to a partner with a Loan Account
Assume that Other Assets, were realized at P55,000 thus resulting to a loss.

Statement of Liquidation
Cash Other Assets
Balance before liquidation 20,000.00 80,000.00
Realization of assets and distribution of loss 55,000.00 (80,000.00)
Balances 75,000.00 -
Payment of Liabilities (28,000.00)
Offset Ds loan against his deficiency
Balances 47,000.00 -
Payment to Partners (47,000.00)
- -
Liabilities D, Loan Partner D Partner E
28,000.00 2,000.00 9,000.00 21,000.00
(10,000.00) (10,000.00)
28,000.00 2,000.00 (1,000.00) 11,000.00
(28,000.00)
(1,000.00) 1,000.00
- 1,000.00 - 11,000.00
(1,000.00) - (11,000.00)
- - - -
Partner F
40,000.00
(5,000.00)
35,000.00

35,000.00
(35,000.00)
-
Lump Sum Liquidation

Assets
Cash 20,000.00
Other Assets 80,000.00
100,000.00

Liabilities and Capital

Liabilities 28,000.00
D, loan 2,000.00

D, Capital (40%) 9,000.00

E, Capital (40%) 21,000.00
F, Capital (20%) 40,000.00
100,000.00
Loss on Realization resulting capital deficiency to a solvent partner
Assume that Other Assets, were realized at P49,500 thus resulting to a loss.

Statement of Liquidation
Cash Other Assets
Balance before liquidation 20,000.00 80,000.00
Realization of assets and distribution of loss 49,500.00 (80,000.00)
Balances 69,500.00 -
Payment of Liabilities (28,000.00)
Offset Ds loan against his deficiency
Cash Investment of D 1,200.00
Balances 42,700.00 -
Payment to Partners (42,700.00)
- -
Liabilities D, Loan Partner D Partner E
28,000.00 2,000.00 9,000.00 21,000.00
(12,200.00) (12,200.00)
28,000.00 2,000.00 (3,200.00) 8,800.00
(28,000.00)
(2,000.00) 2,000.00
1,200.00
- - - 8,800.00
- - (8,800.00)
- - - -
Partner F
40,000.00
(6,100.00)
33,900.00

33,900.00
(33,900.00)
-
Lump Sum Liquidation

Assets
Cash 20,000.00
Other Assets 80,000.00
100,000.00

Liabilities and Capital

Liabilities 28,000.00
D, loan 2,000.00

D, Capital (40%) 9,000.00

E, Capital (40%) 21,000.00
F, Capital (20%) 40,000.00
100,000.00
Loss on Realization Resulting Capital Deficiency to an Insolvent Partner
Assume that Other Assets, were realized at P49,500 thus resulting to a loss.

Statement of Liquidation
Cash Other Assets
Balance before liquidation 20,000.00 80,000.00
Realization of assets and distribution of loss 49,500.00 (80,000.00)
Balances 69,500.00 -
Payment of Liabilities (28,000.00)
Offset Ds loan against his deficiency
Absorption of Loss by remaining partners
Balances 41,500.00 -
Payment to Partners (42,700.00)
(1,200.00) -
Liabilities D, Loan Partner D Partner E
28,000.00 2,000.00 9,000.00 21,000.00
(12,200.00) (12,200.00)
28,000.00 2,000.00 (3,200.00) 8,800.00
(28,000.00)
(2,000.00) 2,000.00
1,200.00 (800.00)
- - - 8,000.00
- - (8,000.00)
- - - -
Partner F
40,000.00
(6,100.00)
33,900.00

(400.00)
33,500.00
(33,500.00)
-
Lump Sum Liquidation

Assets
Cash 8,000.00
Other Assets 42,000.00
50,000.00

Liabilities and Capital

Liabilities 33,000.00

D, Capital 9,000.00
E, Capital 5,000.00
F, Capital 3,000.00
50,000.00
P/L = Equally
Partnership is Insolvent, Partners are Personally Solvent
Assume that Other Assets, were realized at P19,500 thus resulting to a loss.

Statement of Liquidation
Cash Other Assets
Balance before liquidation 8,000.00 42,000.00
Realization of assets and distribution of loss 19,500.00 (42,000.00)
Balances 27,500.00 -
Partial Payment of Liabilities (27,500.00)
Balances - -
Additional Investment by E and F 7,000.00
Balances 7,000.00 -
Full Payment of Liabilities (5,500.00) -
Payment to Partners (1,500.00)
- -
Liabilities Partner D Partner E Partner F
33,000.00 9,000.00 5,000.00 3,000.00
(7,500.00) (7,500.00) (7,500.00)
33,000.00 1,500.00 (2,500.00) (4,500.00)
(27,500.00)
5,500.00 1,500.00 (2,500.00) (4,500.00)
2,500.00 4,500.00
5,500.00 1,500.00 - -
(5,500.00) - - -
(1,500.00) - -
- - - -
Assets
Cash 10,000.00
Other Assets 100,000.00
110,000.00

Liabilities and Capital

Liabilities 60,000.00

D, Capital 5,000.00
E, Capital 15,000.00
F, Capital 30,000.00
110,000.00
P/L = Equally
Partnership is Insolvent, Partners are Personally Insolvent
Assume that Other Assets, were realized at P40,000 thus resulting to a loss.

Statement of Liquidation
Cash Other Assets
Balance before liquidation 10,000.00 100,000.00
Realization of assets and distribution of loss 40,000.00 (100,000.00)
Balances 50,000.00 -
Partial Payment of Liabilities (50,000.00)
Balances - -
Additional Investment by D 15,000.00
Balances 15,000.00 -
Full Payment of Liabilities (10,000.00) -
Balances 5,000.00 -
Additional Loss to D and F
Additional Investment by D 2,500.00
Balance 7,500.00 -
Payment to Partners (7,500.00)
- -

Solvent
Insolvent
Insolvent
Liabilities Partner D Partner E Partner F
60,000.00 5,000.00 15,000.00 30,000.00
(20,000.00) (20,000.00) (20,000.00)
60,000.00 (15,000.00) (5,000.00) 10,000.00
(50,000.00)
10,000.00 (15,000.00) (5,000.00) 10,000.00
15,000.00
10,000.00 - (5,000.00) 10,000.00
(10,000.00) - - -
- - (5,000.00) 10,000.00
(2,500.00) 5,000.00 (2,500.00)
2,500.00 -
- - - 7,500.00
- (7,500.00)
- - - -

Partners Personal Assets

D 100,000.00
E 50,000.00
F 5,000.00
Personal Liabilities
25,000.00
50,000.00
60,000.00
 Assets
Cash 5,000.00
Other Assets 155,000.00
160,000.00

Liabilities and Capital

Liabilities 40,000.00

D, Capital 30,000.00
E, Capital 40,000.00
F, Capital 50,000.00
160,000.00
P/L = Equally

Book Value Cash Realized Loss

July 80,000.00 65,000.00 (15,000.00)
August 42,000.00 24,000.00 (18,000.00)
September 33,000.00 12,000.00 (21,000.00)
155,000.00 101,000.00 (54,000.00)
Statement of Liquidation
Cash
Balance before liquidation 5,000.00
Realization of assets and distribution of loss (July) 65,000.00
Balances 70,000.00
Payment of Liabilities (40,000.00)
Payment to Partners (30,000.00)
Balances -
Realization of assets and distribution of loss (August) 24,000.00
Balances 24,000.00
Payment to Partners (24,000.00)
Balances -
Realization of assets and distribution of loss (September) 12,000.00
Payment to Partners (12,000.00)
Balance -

Schedule of Safe Payment D

Capital Balances 25,000.00
Add Loan Balances -
Total Interest 25,000.00
Possible Loss (75000 x 1/3) (25,000.00)
Safe Payment -

Other Assets 75,000.00

Add: Cash Withheld -
Possible Loss 75,000.00

Schedule of Safe Payment D

Capital Balances 19,000.00
Add Loan Balances -
Total Interest 19,000.00
Possible Loss (33000 x 1/3) (11,000.00)
Safe Payment 8,000.00
Other Assets Liabilities Partner D Partner E
155,000.00 40,000.00 30,000.00 40,000.00
(80,000.00) (5,000.00) (5,000.00)
75,000.00 40,000.00 25,000.00 35,000.00
(40,000.00)
(10,000.00)
75,000.00 - 25,000.00 25,000.00
(42,000.00) (6,000.00) (6,000.00)
33,000.00 - 19,000.00 19,000.00
- - (8,000.00) (8,000.00)
33,000.00 - 11,000.00 11,000.00
(33,000.00) (7,000.00) (7,000.00)
(4,000.00) (4,000.00)
- - - -

E F
35,000.00 45,000.00
- -
35,000.00 45,000.00
(25,000.00) (25,000.00)
10,000.00 20,000.00

E F
19,000.00 19,000.00
- -
19,000.00 19,000.00
(11,000.00) (11,000.00)
8,000.00 8,000.00
Partner F
50,000.00
(5,000.00)
45,000.00

(20,000.00)
25,000.00
(6,000.00)
19,000.00
(8,000.00)
11,000.00
(7,000.00)
(4,000.00)
-
 Cash Priority Program

Assets
Cash 8,000.00
Other Assets 192,000.00
200,000.00

Liabilities and Capital

Liabilities 61,000.00

F, Loan 4,000.00

D, Capital (40%) 40,000.00

E, Capital (30%) 45,000.00
F, Capital (30%) 50,000.00
200,000.00

50,000.00 39,000.00 11,000.00

D 4,400.00 4,400.00
E 15,000.00 3,300.00 18,300.00
F 24,000.00 3,300.00 27,300.00
Compute the loss absorption potential of each partner

Partner Partner's Interest (Capital + Loan)

D 40,000.00
E 45,000.00
F 54,000.00

The computation here shows that loss of P100,000 would eliminate D's capital. Similarly, a

Determine the priority of payment to partners

Loss absorption balances

Priority I - to F (F over E)
Balances
Priority II - to E and F (over D)
Balances

Compute the amount of cash to eb paid to the partners under each priority

Priority I F (30000*0.30)
Priority II
E (50000*0.30)
F (50000*0.30)

D
E
F

First 9,000 available for distribution to partners should be paid to F

The next 30,000 should be paid to E and F in the ration 30:30
Any amount in excess of 39,000 should be paid to D,E,F in the P/L ratio of 40:30:30
 Profit and Loss Percentage Loss Absorption Potential
0.4 100,000.00
0.3 150,000.00
0.3 180,000.00

would eliminate D's capital. Similarly, a loss of P150,000 and a loss of P180,000 would eliminate the capotal o

D E
100,000.00 150,000.00

100,000.00 150,000.00
(50,000.00)
100,000.00 100,000.00

ners under each priority

9,000.00

15,000.00
15,000.00

-
15,000.00
24,000.00

uld be paid to F

E,F in the P/L ratio of 40:30:30

a loss of P180,000 would eliminate the capotal of E and F.

F
180,000.00
(30,000.00)
150,000.00
(50,000.00)
100,000.00
Collection on accounts receivable 51,000.00
Sale of inventory 38,000.00
Liquidation Expenses (2,000.00)
Gain on settlement of accounts payable 3,000.00
Cash retained (10,000.00)
Net Cash Proceeds 80,000.00
Carrying amount of non-cash assets (307,000.00)
Total loss on sale (227,000.00)

A (50%) B (30%) C (20%)

Capital Balances 118,000.00 90,000.00 74,000.00
Loans (30,000.00) 20,000.00
Total 88,000.00 110,000.00 74,000.00
Allocation of Loss (113,500.00) (68,100.00) (45,400.00)
Balance (25,500.00) 41,900.00 28,600.00
Absorption of loss 25,500.00 (15,300.00) (10,200.00)
Payment to Partners - 26,600.00 18,400.00
 Cash Liabilities J S
Balance 40,000.00 60,000.00 48,000.00 72,000.00
Sales of NCA and Loss on
Realization 90,000.00 (15,000.00) (9,000.00)
Potential Loss Remaining Assets (45,000.00) (27,000.00)
Payment of Liabilities (60,000.00) (60,000.00)
Balance 70,000.00 - (12,000.00) 36,000.00
Absorption of Loss 12,000.00 (7,200.00)
Payment to Partners (70,000.00) (28,800.00)
Balance - - - -
 H
70,000.00

(6,000.00)
(18,000.00)

46,000.00
(4,800.00)
(41,200.00)
-
 A B
60% 40%

30,000.00 20,000.00
(79,100.00) (65,245.00)
62,275.00 70,695.00
13,175.00 25,450.00 38,625.00
12,825.00 8,550.00 21,375.00
26,000.00 34,000.00
 KK LL MM
50% 25% 25%

88,000.00 62,000.00 56,000.00

(55,000.00) (27,500.00) (27,500.00) -110000
(2,000.00) (1,000.00) (1,000.00) -4000
(1,600.00) (800.00) (800.00) -3200
29,400.00 32,700.00 26,700.00
 A B
50% 30%

80,000.00 90,000.00
(15,000.00) (9,000.00)
(50,000.00) (30,000.00)
15,000.00 51,000.00
 C
20%

70,000.00
(6,000.00) (30,000.00)
(20,000.00) (100,000.00)
44,000.00
A B C
0.14285714 0.19047619 0.285714286
1,000.00 25,000.00 25,000.00
(5,428.57) (7,238.10) (10,857.14)
(4,428.57) 17,761.90 14,142.86
4428.57 (3,920.63) (10,731.15)
(0.00) 13,841.27 3,411.71

closest due to round of during split of loss

 D
0.380952381
9,000.00
(14,476.19) Liabilities 3,000.00
(5,476.19) Capital 60,000.00
5476.19
(0.00) Cash 1,800.00
Non Cash 61,200.00
round of during split of loss
Proceeds 23,200.00
Loss (38,000.00)