Problem 1.

Bill, Page, Larry, and Scott have decided to terminate their partnership. The partnership's balance sheet at
the time they decide to wind up is as follows:
Cash . . . . . . . . . . . . . . . . . P100,000 Liabilities . . . . . . . . . . . . . . . . . . . P 100,000
Noncash assets . . . . . . . . . 300,000 Bill, capital . . . . . . . . . . . . . . . . . 25,000
Page, capital . . . . . . . . . . . . . . . 110,000
Larry, capital . . . . . . . . . . . . . . . 100,000
________ Scott, capital . . . . . . . . . . . . . . . 65,000
Total . . . . . . . . . . . . . . . . . P400,000 Total . . . . . . . . . . . . . . . . . . . . . . P 400,000
.
During the winding up of the partnership, the other assets are sold for P150,000 and the accounts payable
are paid. Page and Larry are personally solvent, but Bill and Scott are personally insolvent. The partners
share profits and losses in the ratio of 3:2:1:4. Compute the cash to be distributed to each partner. (Half
point each) 0; 70,000; 80,000; 0
Problem 2.
Liz, Bob, and Alex are partners in a company that is being liquidated. They share profits and losses 30
percent, 45 percent, and 25 percent, respectively. When the liquidation begins, they have capital account
balances of P20,000, P30,000, and P15,000, respectively. The partnership just incurred liquidation
expenses of P30,000 and sold equipment with a historical cost and accumulated depreciation of P135,000
and P45,000, respectively for P50,000. What is the balance in Liz’s capital account after these transactions
are completed?
(P1,000)

Problem 3
Donald, Marion, and Jeff are liquidating their partnership. At the date the liquidation begins Donald,
Marion, and Jeff have capital account balances of P147,000, P260,000, and P285,000, respectively and
the partners share profits and losses 35%, 25%, and 40%, respectively. In addition, the partnership has a
P28,000 Notes Payable to Donald and a P15,000 Notes Receivable from Jeff. When the liquidation begins,
what is the loss absorption power with respect to Marion? P1,040,000
Problem 4
The Abrams, Bartle and Creighton partnership began the process of liquidation with the following balance
sheet
Cash . . . . . . . . . . . . . . . P 16,000 Liabilities. . . . . . . . . . . . . . . . . . . . P 150,000
. .
Noncash assets . . . . . . 434,000 Abrams, capital . . . . . . . . . . . . . . 80,000
Bartle, capital . . . . . . . . . . . . . . . . 90,000
__________ Creighton, capital. . . . . . . . . . . . . 130,000
Total . . . . . . . . . . . . . . . P 450,000 Total Liabilities and Equities. . . . . P 450,000

Abrams, Bartle and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are
expected to be P12,000. The non-cash assets were sold for P134,000. Which partner(s) would have had to
contribute assets to the partnership to cover a deficit in his or her capital account and how much? Abrams
– P13,600; Creighton – P26,000

Problem 5
The balance sheet of the Jody, Kane, and Lark partnership on May 1, 20x4 (before commencement of
partnership liquidation) was as follows:

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Cash P 54,000 Accounts payable P 28,000

Inventory 60,000 Notes payable 60,000

Loan to Jody 10,000 Jody, capital (30%) 32,000

Loan to Lark 16,000 Kane, capital (45%) 90,000

Plant assets-net 110,000 Lark, capital (25%) 40,000

Total assets P 250,000 Total liab./equity P 250,000

Liquidation events in May were as follows:

- The inventory was sold for P6,000 below book value;
- Plant assets with a book value of P50,000 were sold for P60,000.
How much will each partner receive on the available cash on April 30, 20x4? (Half point each)
P5,200; P64,800; P10,000
Problem 6
The partnership of Hanly, Ide, and Jen was dissolved. By August 1, 20x4, all assets had been converted
into cash and all partnership liabilities were paid. The partnership balance sheet on August 1, 20x4 (with
partner residual profit and loss sharing percentages) was as follows:

Cash……………………. P 50,000 Hanly, capital(30%)… P 4,000

Ide, capital(20%)……. (60,000)
_________ Jen, capital(50%)…… 106,000
Total assets…………….. P 50,000 Total equity P 50,000

The value of partners' personal assets and liabilities on August 1, 2006 were as follows:
Hanly Ide Jen
Personal assets P 74,000 P 120,000 P 56,000
Personal liabilities 72,000 80,000 60,000
How much will each partner receive on the available cash on August 1, 20x4? (Half point each) 0; 0;
92,000
Problem 7
The partnership of Mick, Keith, and Charlie has been dissolved and is in the process of liquidation. On July
1, 20x4, just before the second cash distribution, the assets and equities of the partnership along with
residual profit sharing ratios were as follows:

Assets Liabilities and Equity

Cash . . . . . . . . . . . . . . . . . P 200,000 Liabilities . . . . . . . . . . . . . . . . . . . P150,000

Receivables Net . . . . . . . 50,000 Mick, Capital 50% . . . . . . . . . . . 100,000

Inventories . . . . . . . . . . . . 150,000 Keith, Capital 30% . . . . . . . . . . . 175,000

Equipment-net . . . . . . . . 100,000 Charlie, Capital 20% . . . . . . . . . 75,000

Total Assets . . . . . . . . P500,000 Total Liabilities and Equity . . P500,000

Assume that the available cash is distributed immediately, except for a P25,000 contingency fund that is
withheld pending complete liquidation of the partnership. How much cash should be paid to each of the
partners? (Half point each) 0; 25,000; 0
Problem 8
The BIG Partnership has decided to liquidate at December 31, 20x4. The capital and loan balances of the
partners at December 31, 20x4, are provided below:

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 Profit and Loss
Partners Capital Balances Loan Balances Sharing Percentages
B P 210,000 CR P 40,000 CR 50%
I 240,000 CR 100,000 DR 20%
G 40,000 CR 80,000 CR 30%
Compute the loss absorption balance of each partner? (Half point each) 500,000; 700,000; 400,000

Problem 9
On June 30, 20x4, the Warle, Xin, and Yates partnership had the following fiscal year-end balance
sheet:
Cash . . . . . . . . . . . . . . . . . . P 4,000 Accounts payable . . . . . P 7,000

Accounts receivable . . . . . 6,000 Loan from Xin . . . . . . . . . 5,000

Inventory . . . . . . . . . . . . . . . 14,000 Warle, capital (20%) . . . . 14,000

Plant assets-net . . . . . . . . . . 12,000 Xin, capital (30%) . . . . . . 10,000

Loan to Warle . . . . . . . . . . . 6,000 Yates, capital (50%). . . . . 6,000

Total assets . . . . . . . . . . . . . P 42,000 Total liab./equity P 42,000

 Receivables of P3,000 were collected and the inventory was sold for P4,000. All available cash was
distributed on July 31, except for P2,000 that was set aside for future liquidation expenses
a. The cash available for distribution to the partners on July 31, 20x4 is P2,000
b. How much cash would Xin receive from the cash that is available for distribution on July 31? 0;
2,000; 0
Problem 10

Future liquidation expenses amount to P80,000.

a. Compute the maximum possible loss on December 31,2021. P480,000
b. How much is the cash withheld on December 31,2021? P1,680,000
c. How much cash is distributed to each partner on December 31,2021? (One point each) 0; 302,000;
268,000

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 d. How much is the remaining interest of each partner after the December 31 cash distribution? (Half
point each)
Problem 11
On December 1, 2022, A, B and C decided to liquidate their partnership. As of this date, their capital
balances were P300,000, P200,000 and P150,000 respectively. The partners share profits and losses on a
30:50:20 ratio. Before liquidation, the partnership has total assets of P720,000. Net proceeds received from
the sale of non-cash assets amounted to P450,000. C received P115,000 in the settlement of his interest.
How much was the balance of cash before the sale of non-cash assets? P95,000 cash; loss on realiz. –
175,000

Problem 12
On December 1, 2022, A, B and C decided to liquidate their partnership. As of this date, their capital
balances were P300,000, P200,000 and P150,000 respectively. The partners share profits and losses on a
30:50:20 ratio. Before liquidation, the partnership has total assets of P700,000. Net proceeds received from
the sale of non-cash assets amounted to P480,000. C received P100,000 in the settlement of his interest.
How much was received by partner A? P225,000

Problem 13
A, B, and C are liquidating their partnership. At the date the liquidation begins A, B, and C have capital
account balances of P147,000, P261,000, and P290,450, respectively and the partners share profits and
losses 35%, 30%, and 35%, respectively. In addition, the partnership has a P28,000 Advances from A and
a P15,000 Loan to C. Using the Cash Priority Program, what is the total amount of cash needed in order to
satisfy until the second priority? P211,450

Problem 14
A, B, and C are liquidating their partnership. At the date the liquidation begins A, B, and C have capital
account balances of P145,000, P265,000, and P280,000, respectively and the partners share profits and
losses 30%, 25%, and 45%, respectively. In addition, the partnership has a P25,000 Due to B and a
P10,000 Loan to A. Using the Cash Priority Program, what is the loss absorption balance of the partner
who is the most vulnerable to losses?