Case A: Other assets were sold for P 680,000. There is a gain on realization.

3T Partnership
Statement of Liquidation
December 31, 2019

Cash Other Liabilities Loan Capital

Assets

Tak Toe Tik Tak Toe

Profit and Loss Ratio 4 4 2

Balances before liquidation 40,000 680,000 224,000 10,000 16,000 190,000 120,000 160,000
Realization and distribution of gain 700,000 (680,000) 8,000 8,000 4,000
Balances 740,000 224,000 10,000 16,000 198,000 128,000 164,000
Payment of liabilities 224,000 (224,000)
Balances 516,000 10,000 16,000 198,000 128,000 164,000
Payment to partners (516,000) (10,000) (16,000) (198,000) (128,000) (164,000)
Journal Entries:

a) Sale of other assets and distribution of gain

Cash 700,000
Other Assets 680,000
Tik, Capital 8,000
Tak, Capital 8,000
Toe, Capital 4,000

b) Payment of liabilities

Liabilities 224,000
Cash 224,000

c) Payment to partners

Tak, Loan 10,000

Toe, Loan 16,000
Tik, Capital 198,000
Tak, Capital 128,000
Toe, Capital 164,000
Cash 516,000
Case B: Other assets were sold for P 500,000. There is a loss on realization but no capital deficiency.

3T Partnership
Statement of Liquidation
December 31, 2019

Cash Other Liabilities Loan Capital

Assets

Tak Toe Tik Tak Toe

Profit and Loss Ratio 4 4 2

Balances before liquidation 40,000 680,000 224,000 10,000 16,000 190,000 120,000 160,000
Realization and distribution of loss 500,000 (680,000) (72,000) (72,000) (36,000)
Balances 540,000 224,000 10,000 16,000 118,000 48,000 124,000
Payment of liabilities 224,000 (224,000)
Balances 316,000 10,000 16,000 118,000 48,000 124,000
Payment to partners (316,000) (10,000) (16,000) (118,000) (48,000) (124,000)
Journal Entries:

a) Sale of other assets and distribution of loss

Cash 500,000
Tik, Capital 72,000
Tak, Capital 72,000
Toe, Capital 36,000
Other Assets 680,000

b) Payment of liabilities

Liabilities 224,000
Cash 224,000

c) Payment to partners

Tak, Loan 10,000

Toe, Loan 16,000
Tik, Capital 118,000
Tak, Capital 48,000
Toe, Capital 124,000
Cash 316,000
Case C: Other assets were sold for P 370,000. There is a loss on realization with capital deficiency, right of offset is exercised.

3T Partnership
Statement of Liquidation
December 31, 2019

Cash Other Liabilities Loan Capital

Assets

Tak Toe Tik Tak Toe

Profit and Loss Ratio 4 4 2

Balances before liquidation 40,000 680,000 224,000 10,000 16,000 190,000 120,000 160,000
Realization and distribution of loss 370,000 (680,000) (124,000) (124,000) (62,000)

Balances 410,000 224,000 10,000 16,000 66,000 (4,000) 98,000

Payment of liabilities 224,000 (224,000)
Balances 186,000 10,000 16,000 66,000 (4,000) 98,000
Offset Tak, loan to Tak (4,000) 4,000
capital deficiency
Balances 186,000 6,000 16,000 66,000 98,000
Payment to partners (186,000) (6,000) (16,000) (66,000) (98,000)
Journal Entries:

a) Sale of other assets and distribution of loss

Cash 370,000
Tik, Capital 124,000
Tak Capital 124,000
Toe, Capital 62,000
Other Assets 680,000

b) Payment of liabilities

Liabilities 224,000
Cash 224,000

c) Offset loan to capital deficiency

Tak, Loan 4,000

Tak, Capital 4,000

d) Payment to partners

Tak, Loan 6,000

Toe, Loan 16,000
Tik, Capital 66,000
Toe, Capital 98,000
Cash 186,000
Case D: Other assets were sold for P 340,000. There is a loss on realization with capital deficiency, deficient partner is solvent.

3T Partnership
Statement of Liquidation
December 31, 2019

Cash Other Liabilities Loan Capital

Assets

Tak Toe Tik Tak Toe

Profit and Loss Ratio 4 4 2

Balances before liquidation 40,000 680,000 224,000 10,000 16,000 190,000 120,000 160,000
Realization and distribution of loss 340,000 (680,000) (136,000) (136,000) (68,000)
Balances 380,000 224,000 10,000 16,000 54,000 (16,000) 92,000
Payment of liabilities 224,000 (224,000)
Balances 156,000 10,000 16,000 54,000 (16,000) 92,000
Offset Tak, loan to Tak (10,000) 10,000
capital deficiency
Balances 156,000 16,000 54,000 (6,000) 92,000
Payment to partners (156,000) (16,000) (50,000) (90,000)
(see schedule)
Balances - 4,000 (6,000) 2,000
Additional investment of Tak 6,000 6,000
Balances 6,000 4,000 2,000
Payment to Partners (6,000) (4,000) (2,000)
 3T Partnership
Schedule to Accompany Statement of Liquidation
December 31, 2019