Problem 1

On January 1, 2015, DD and EE decided to form partnership. At the end of the year, the
partnership made a net income of P120,000. The capital accounts of the partnership show the
following transactions.
DD, Capital CC, Capital
Dr Cr Dr Cr
January 1 P40,000 P25,000
April 1 5,00
0
June 1 10,000
August 1 10,000
September 3,000
1
October 1 5,000 1,000
December 1 4,000 5,000
Assuming an interest of 20% per annum is given each partner on which 5% is from beginning
capital, 10% on average capital and 5% base on ending capital balance before closing the net
income and drawing accounts. Salary of P5,400 and 6,000 is given to CC and DD respectively.
DD will receive a bonus of 10% on net income before salary but after interest and bonus.
They agreed to share the profit and losses 25% and 35% to DD and CC respectively. The profit
of the partnership after deducting the salary, interest and bonus for the year ended December
31, 2017 is P147,000.
Requirement:
a. What amount should be allocated to CC as share in net income?
b. Compute the amount of bonus given to DD.

Problem 14
A balance sheet for the partnership of John, Kier, and Larry, who share profits in the ratio of
2:1:1, shows the following balances just before liquidation:

Cash P 12,000
Other Assets 59,500
Liabilities 20,000
John, capital 22,000
Kier, capital 15,500
Larry, capital 14,000

On the first month of the liquidation certain assets are sold for P32,000. Liquidation
expenses of P 1,000 are paid, and additional liquidation expenses are anticipates.
Liabilities are paid amounting to P 5,400, and sufficient cash is retained to insure the
payment to creditors before making payments to partners. On the first payment to
partners, John receives P 6,250.

Compute:

(1) the total cash distributed to the partners in the first installment, and
(2) the amount of cash withheld for anticipated liquidation expenses and unpaid
liabilities.
 a. (1) 20,000 ; (2) 17,600 c. (1) 23,000 ; (2) 17,600
b. (1) 23,000 ; (2) 14,600 d. (1) 20,000 ; (2) 18,100
Problem 23
Following is the balance sheet of Cryogenix Partnership at March 31, 2002, when the
partnership is to be liquidated:

Assets Liabilities and Capital

Cash P 6,000 Liabilities P 12,400

Other Assets 126,000 Carl, Loan 12,000
Des, Loan 14,400
Flong, Loan 9,600
Carl, Capital (25%) 16,200
Des, Capital (25%) 12,000
Ena, Capital (25%) 37,700
Flong, Capital (25%) 17,700

P 132,000 P 132,000

During the month of April 2002, assets having a book value of P 18,000 are sold
at a loss of P 2,400. Liquidation expenses of P 600 are paid as well as P 7,200 of the
liabilities. Of the liabilities shown in the balance sheet, P 240 represents salary payable
to Flong and P160 represents salary payable to Ena.

On April 30, 2002, cash is to be distributed to Carl, Des, Ena and Flong as follows:

Carl Des Ena Flong

a. - - - 1,950
b. - - 9,000 -
c. - - - 9,000
d. 1,950 1,950 1,950 1,950

Problem 7 (Moderate)
Malino, Marapo and Mesa are partners sharing profits and losses in the ratio of
20:12:8. During the year their investment and withdrawals are as follows:
Partners Investment Withdrawals
Malino P40,000 P25,000
Marapo 35,000 12,500
Mesa 75,000 12,500
On December 31, 2011, the partners decided to liquidate the business. After
exhausting partnership assets, liabilities of P25,000 remain unpaid. Malino is
personally insolvent. The gain or (loss) on realization and the amount of cash
Mesa will receive upon liquidation are:
a. (P25,000) and P37,500 respectively
 b. (P25,000) and P18,500 respectively
c. (P125,000) and P37,000 respectively
d. (P125,000) and P18,500 respectively
TOTAL malino marapo mesa
Capital balances beforerealization (net) P100,000 P15,000 P22,500 P62,500
Loss on realization (squeeze) ( 125,000) (  62,500) ( 37,500) ( 25,000)
Capital balances after realization
(liabilities-unpaid) (P 25,000) (  47,500) ( 15,000) P37,500
Elimination of malino's deficiency _______– __47,500 ( 28,500) ( 19,000)
Balances (P 25,000) – (P43,500) P18,500
Investment by dd __43,500 ______– _43,500 _____–
Payment to mesa P  18,500 P       – P       – P18,500

Problem 8 (Easy)
On December 31, 2011, the accounting records of Louie, Louis and Louella
partnership included the following ledger account balance:
Receivable from Louie P232,320 Louie, Capital P974,160
Loan to Louella 70,400 Louis, Capital 796,400
Salary payable to 237,600 Louella, Capital 855,360
Louie
Total assets include cash amounting to P412,720. The partnership was
liquidated on December 31, 2011, and Louie receive P618,640 cash pursuant to
the liquidation. Louie, Louis and Louella shared net income and losses in a
8.8:5.28:3.52 ratio respectively. In the settlement to partners, how much cash is
paid to Louis?
a. P960,080 b. P1,034,000
c. P0 d. P953,920

Problem 9 (Difficult)
When Allan and Mahalaleel, partners who share profit equally, were
incapacitated due to an airplane accident, a liquidator was appointed to wind
up their partnership. Their statement of financial position before liquidation is
as follows:
Assets Liabilities and Capital
Cash P61,950 Liabilities P33,630
Other 177,000 Allan, Capital 127,440
assets
Goodwill 17,700 Mahalaleel, capital 95,580
Total assets P256,650 Total liabilities and capital P256,650
The liquidator anticipates that considerable time would be required to dispose
the assets. The expenses expected to be incurred in liquidating the partnership
are estimated at P17,700. At this time the amounts of cash to be distributed
safely to each partner are:
a. Allan P10,620; Mahalaleel P0 b. Allan P26,550; Mahalaleel P0
c. Allan P26,550; Mahalaleel d. Allan P8,850; Mahalaleel
P1,770 P1,770

Problem 10 (Difficult)
The statement of financial position for Celso and Jufel partnership on June 1,
2011 before liquidation is as follows:
Assets Liabilities
Cash P5,000 Liabilities P20,000
Other assets 55,000 Celso, Capital (60%) 22,500
Staple wire 0 Jufel, Capital (40%) 17,500
Total assets P60,00 Total P60,000
0
In June, assets with a book value of P22,000 are sold for P18,000, creditor are
pain in full, and P2,000 is paid to partners. In July, asset with book value of
P10,000 are sold for P12,000, liquidation expenses of P500 are paid and cash of
P12,500 is paid to partners. In August the remaining assets are sold for P22,500.
In July, Celso should receive:
a. P0 b. P7,200 c. P5,300 d. P12,000
BALANCES CASH PAYMENT
Celso jufel celso jufel
Total Interest P22,500 P17,500
Profit and Loss ratio _____60% _____40%
Loss absorption balances 37,500 43,750
Priority I - to jufel ______– (  6,250) _____– _2,500
Total P37,500 P37,500 P      – P2,500
Further cash distribution - Profit and Loss ratio
All the P2,000 should be paid jufel, since she is entitled to P2,500 under Priority I

CASH MONZON NIEVA

Cash distribution P12,500 – –
PI to jufel (2,500-2,000) (    500) – 500
Balances, 6:40 12,000 7,200 4,800
Cash distribution P        – P  7,200 P5,300