PARTNERSHIPS

Cash P 106,240 Loan from S P 20,480

PARTNERSHIP LIQUIDATION. Other non-cash R, capital (30%) 272,640
1. LUMP-SUM assets 724,480
Loan to R 15,360 S, Capital (50%) 139,520
DONNA, JANICE and ELLERY plan to liquidate their Liabilities 268,800 T, capital (20%) 144,640
partnership. They have always shared losses and gains in a 3. If in the first cash distribution, S received P51,200, which
2:3:5 ratio, and on the day of the liquidation their balance of the following statements is incorrect?
sheet appeared as follows: a. Total amount distributed to partners is P344,320.
b. Total amount paid to creditors is P268,800.
DONNA, JANICE, and ELLERY c. Total amount realized from the non-cash assets is
Balance Sheet P613,120
December 31, 2020 d. R received an amount equal to 192,000.
Assets Liabilities and Capital
Cash P68,750 Accounts payable P130,370 The partnership ABC is currently liquidating and on
ELLERY, loan 5,000 February 15, 2020, their balances in capital and their
Other assets 451,250 DONNA, Capital 76,250 profit and loss (P&L) ratios are shown below:
JANICE, loan 50,000 JANICE, capital 250,880
_______ ELLERY, capital 107,500 Apple, capital (P&L 40%) P17,600
Total assets P570,000 Total equities P570,000 Bryan, capital (P&L 20%) 11,200
Cecile, capital (P&L 40%) ( 9,600)
The other assets are sold for P212,500, and assume the Assume non-cash assets have been all disposed and Cecile
following information on partners’ net assets, exclusive of has promised to pay his deficiency in a week’s time,
their respective partnership interests at that point.
4, Calculate the amount to be received by one of the partners
DONNA JANICE ELLERY if cash is paid immediately on February 15, 2020.
Assets P687,500 P375,000 P 167,000 a. Apple, P22,000 c. Bryan, P 8,000
Liabilities 562,500 350,000 161,875 b. Bryan, P12,000 d. Apple, 12,000

Required: Prepare general journal entries to record the sale

of the other assets and the distribution of the cash to the 2. BY INSTALLMENT
proper parties. Show supporting computations in good form.
On December 31, 2020, the balance sheet of CDO Partnership
is as follows:
Assets Liabilities
Cash P 15,360 Account Payable P51,200
MULTIPLE CHOICE SlryPyble, Celia 10,240
Partners EDMAN, SALLY and ZARAH decided to liquidate their Noncash assets 271,360 Dave, Loan 20,480
partnership on November 30, 2020. Their capital balances Loan to Oleg 10,240 Celia, Capital 38,912
and profit and loss ratio are as follows: Dave, Capital 73,728
Capitals P & L Ratio _______ Oleg, Capital 102,400
Edman P 480,000 40% P296,960 P 296,960
Sally 627,200 40%
Zarah 192,000 20% Profit and losses were shared as follows; Celia, 30%; Dave,
30%; Oleg, 40%. It was decided to liquidate the business.
The net income from January 1, 2020 to November 30, 2020 The following is a summary of the realization and liquidation
is P524,800. On November 30, 2020, the cash balance is activities.
P416,000, and that of liabilities is P928,000.. Book
Value Cash Paid
Edman is to receive P565,248 in the settlement of his interest. of Asset Cash Expense Liabiliti to
1. Calculate: (1) The loss on realization, and (2) the amount Realized Collected s es Partners
to be realized from the sale of non-cash assets? Paid Paid
a. (1) P311,680; (2) P2,024,320 1st
b. (1) 248,000; (2) 5,100,000 Period 133,120 81,920 4,100 40,000 41,980
c. (1) 620,000; (2) 3,860,000 2nd
d. (1) 552,000; (2) 3,860,000 Period 76,800 51,200 4,800 11,200 40,000
3rd
The partnership of MIKEE and ROSA is in the process of Period 61,440 35,840 3,600 - 38,640
liquidation. On January 1, 2020, the ledger shows account Total 271,360 168,960 12,500 51,200 120,620
balances as follows:
Cash P 6,400 Accounts payable P 9,600 Required:
Accounts receivable 16,000 MIKEE capital 25,600 1. Prepare a statement of liquidation for each period.
Lumber inventory 25,600 ROSA capital 12,800 2. Prepare a program to show how cash is to be distributed
to partners.
On January 10, 2020, the lumber inventory is sold for
P16,000, and during January, accounts receivable of MULTIPLE CHOICE
P13,440 are collected. No further collections on the The balance sheet for CHESTER, JOANA and JOHN
receivables are expected and the partners have incurred Partnership, who share profits and losses in the ratio of
P2,560 of liquidation expenses. Profits are shared 60 50%, 25%, and 25%, respectively, shows the following
percent to Mikee and 40 percent to Rosa. balances just before liquidation.
2. How much cash will partner Mikee and Rosa receive Cash P 19,200
upon liquidation? Other assets 95,200
a. P18,304; P7,936 c. P20,960; P 8,640 Liabilities 32,000
b. P37,600; P18,400 d. P20,500; P20,500 Chester, capital 35,200
Joana, capital 24,800
The accounts of the Partnership of R, S, and T at the end of its John, capital 22,400
fiscal year on November 30, 2020 are as follows:

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On the first month of liquidation, certain assets are sold for They divide profits and losses 3:5:2 to P, B, and A
P51,200. Liquidation expenses of P1,600 are paid, and respectively. They have decided to liquidate the
additional liquidation expenses are anticipated. Liabilities partnership at this date.
are paid amounting to P8,640 and sufficient cash is
retained to insure the payment to creditors before making 2. Determine the amount payable to Partner A if cash is
payments to partners. On the first payment to partners, paid just before the start of liquidation on December
Chester receives P10,000. 31, 2020.
1. Determine the amount of cash withheld for anticipated a. P 22,628.80 c. P 28,285.60
liquidation expenses. b. P 28,240 d. P 28,096
a. P35,200 c. P33,200
b. P29,200 d. P 4,800
A condensed balance sheet with profit sharing percentages
The following balance sheet for the partnership of A, B, for the E, F, and G partnership on January 1, 2020, shows
and C was taken from the books on December 31, 2020. the following:
Assets Liabilities and Capital Cash P 80,000 Liabilities P 64,000
Cash P 32,000 Liabilities P 80,000 Other assets 400,000 E, capital (40%) 80,000
Other Assets 288,000 A, Capital (40%) 59,200 F, capital (40%) 200,000
B, Capital (40%) 104,000 G, capital (20%) 136,000
C, Capital (20%) 76,800 P480,000 P480,000
Total Assets P 320,000 Total Liab & Cap P 320,000 On January 2, 2020, the partners decide to liquidate the
business, and during January they sell assets with a book
2. If the firm is dissolved and liquidates by installment, value of P240,000 for P136,000.
the first sale of the other assets having book value of
P144,000 realized P64,000 and all cash available are 3. How much cash will the partners receive if all available
distributed, the amount to be received by A, B, and C cash, except for a P8,000 contingency fund, is
respectively would be distributed immediately after the sale.
A B C a. All partners will receive P60,000
b. Partners F and G will both receive P72,000
a. P 0 P18,000 P40,000
c. Partner F will receive P96,667 and partner G will
b.P 0 P80,000 P20,000
receive P93,333
c. P20,000 P 0 P 0
d. Partner F will receive P190,000
d.P 0 P 0 P16,000

1. If the firm is dissolved and liquidates and A receives a Claudia, Petra, Mona, and Hilda are partners who share
total of P2,400 in full settlement of his interest, then C profits and losses at 40%, 30%, 20%, and 10%,
would have received a total of respectively. Since two of them have given intention to
a. P56,000 c. P 48,400 withdraw, they have decided to liquidate the partnership
b. P 31,000 d. P 59,000 instead. At this point, the capital balances of the partners
are as follows:
Claudia P40,800
The accounts of the partnership of PBA at December 31, 2020 Petra 17,280
are as follows:
Mona 27,520
Cash P 105,600 Liabilities P 80,000
Hilda 13,600
Non-cash assets 932,800 Loan from B 25,600
4. Which of the following statement is true?
Loan to P 19,200 P, capital 264,000
B, capital 468,800 a. The first available P1,920 will go to Claudia..
A, capital 219,200 b. Hilda will be the last to receive cash
Total P1,057,600 Total P1,057,600 c. The first available P320 will go to Mona.
d. Petra will collect a portion of any available cash
before Hilda receives anything.

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