PARTNERSHIP INSTALLMENT LIQUIDATION

PROBLEM 1

On Nov. 10, 2018, Roseanne, Jisoo, and Jennie, partners had capital account
balances of P20,000, P25,000, and P9,000, respectively, and share profits or losses
in a 4:2:1 ratio.

Required:

1. Prepare the cash priority program assuming that liabilities totaled P20,000 on
Nov 10, 2018.

2. If Roseanne received P4,000, how much cash was paid to all partners?

3. If Roseanne received P13,000, how much did Jennie get?

4. If Jisoo received only P11,000 as a result of the liquidation, what was the loss on
realization of partnership assets (assuming that no partner invested any additional
assets in the partnership?)

PROBLEM 2

Namjon and Jungkook decided to dissolve and liquidate Namjoon and Jungkook on
Sept. 23, 2018. On that date, the statement of financial position of the
partnership is as:

Namjon and Jungkook

Statement of Financial Position

Sept. 23, 2018

 Assets Liabilities and Partner’s Capital

Cash 5,000 Acct. Payable 15,000

Other Assets 100,000 Loan Payable-Jungkook 10,000

Namjon, Capital 60,000

Jungkook, Capital 20,000

Total 105,000 Total 105,000

On Sept. 23, 2018, non-cash assets with a carrying amount of P70,000 realized
P60,000, and P64,000 was paid to creditors and partners, P1,000 being retained to
cover possible liquidation costs. On Oct. 1, 2018, the remaining non-cash assets
realized P18,000 (net of liquidation costs), and all available cash was distributed to
partners. Namjon and Jungkook share profits and losses 40% and 60%,
respectively.

Required: 1. Prepare the cash priority program.

2. Prepare the journal entries to record the realization of assets and distribution
of cash to creditors and partners.