MIDTERM PRETEST – PARTNERSHIP LIQUIDATION

The following were taken from AA Company on June 30,2018 prior to liquidation

Assets Liabilities and Capital

Cash P 50,000 Liabilities P 25,000

Non Cash 100,000 AA, Loan 15,000
AA, Capital 5,000
BB, Capital 60,000
CC, capital 45,000
_________ ___________
Total Assets P 150,000 Total liabilities and capital P 150,000
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The partners share profits and losses in the ratio 5:3:2
The noncash items were realized as follows:

Installment Noncash Realized for

First 50,000 15,000
Second 20,000 10,000
Third 30,000 50,000

Cash is to be distributed as it becomes available.

Required: Prepare the following:

1. Statement of Partnership Liquidation ( 10 pts)
2. Schedule of cash payment ( 3pts)
3. Cash Priority Program ( 3 pts)
4. Journal entries ( 3 pts )