Activity 2: Skill-building Activities (with answer key) (18 mins + 2 mins checking)

Directions: Determine the partners’ share in profit or loss for each of the following situation:
On January 1, 20x1, A and B decided to liquidate their partnership. As of this date, their capital
balances were ₱400,000 and ₱800,000, respectively. The partners share profits and losses on
a
60:40 ratio. Before liquidation, the partnership had ₱80,000 cash and ₱120,000 liabilities. The
partnership incurred loss of ₱480,000 on the sale of non-cash assets. A is solvent but B is
insolvent.

A (60%)

B (40%)

Totals

1,200.00

Capital balances before liquidation

400,000 (288,00

800,000 (192,00 (480,00

Allocation of lon [480Kx (60% & 40%)

Amounts received by parmers

112,000 50,000 720.000

3) Activity 3: Check for Understanding (5 mins)

Direction: Determine the answers to the following questions.
The following condensed statement of financial position is presented for the partnership of AA,
BB and CC, who share profits and losses in the ratio of 4:4:2, respectively:
Cash P 160,000
Other Assets 320,000
Total Assets P 480,000
Liabilities P 180,000
AA, Capital 48,000
BB, Capital 216,000
CC, Capital 36,000
Total Liabilities and Capital P 480,000
The partners agreed to dissolve the partnership after selling the other assets for P200,000.
Requirement:
1. How much should each partner receive upon liquidation?
2. Assume instead that the other assets were sold for P10,000 and that deficient partners, if
any, are solvent. How much should each partner receive upon liquidation?
3. Assume instead that the other assets were sold for P50,000 and that deficient partners, if
any, are insolvent. How much should each partner receive upon liquidation?

AA:4 BB:4 CC:2 Total

Capital / Interest 48,000 216,000 36,000 300,000

+/- Gains & (48,000) (48,000) (24,000) (120,000)

Losses

Realization

(200,000-

320,000)

Remaining 0 168,000 12,000 180,000

Interest

AA:4 BB:4 CC:2 Total

Capital/ Interest, 48,000 216,000 36,000 300,000

+/- Gain & (124,000) (124,000) [62,000) (310,000)

Losses

(10,000)

Realization
10,000 -320,000

Remaining (76,000) 92,000 (26,000) (10,000)

interest

Investment 76,000 26,000 102,000

Distribution to 0 92,000 0 92,000

partners

AA BB CC Total

Capital/Interest 48,000 216,000 36,000 300,000

+/- Gains & (108,000) (108,000) (54,000) (270,000)
Losses

50,000-320,000

Remaining (60,000) 108,000 (18,000) 30,000

Interest

Absorption of 60,000 (78,000) 18,000 0

loss

Distribution to 0 30,000 0 30,000

Partners