1. A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have been paid and the partners are all insolvent. The partners capital accounts are as follows Harry P40,000, Landers P30,000, and Waters P15,000. The partners share profits and losses 4:4:2. If the building is sols for P50,000, how much cash will Harry receive in the final settlement?

A. P28,000

B. P5,000

C. P9,000

D. P18,000

E. P55,000

2. The year-end balances sheet and residual profit and loss sharing percentages for the Lang, Maas, and Neal partnership on December 31, 20X5, are as follows:

Cash P30,000

Loan to Lang 40,000

Other assets 480,000

Total assets P550,000

Accounts payable P200,000

Loan from Maas 50,000

Lang, capital (25%) 70,000

Maas, capital (25%) 80,000

Neal, capital (50%) 150,000

Total liabilities and equity P550,000

The partners agree to liquidate the business and distribute cash when it becomes available. A cash distribution plan for Lang, Maas and Neal partnership will show that cash available, after outside creditors are paid, will initially go to

A. Maas in the amount of P45,000.

B. Maas in the amount of P55,000.

C. Neal in the amount of P90,000.

D. Lang in the amount of P20,000.

3. Offsetting a partner's loan balance against his debit capital balance is referred to as the:

A. Liquidation of assets

B. Right of offset

C. Marshaling of assets

D. Allocation of assets

4. The Keaton, Lewis and Meador partnership had the following balance sheet just before entering liquidation:

Cash P10,000

Noncash assets 300,000

Total P310,000

Liabilities P130,000

Keaton, capital 60,000

Lewis, capital 40,000

Meador, capital 80,000

Total P310,000

Keaton, Lewis and Meador share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for P180,000. Liquidation expenses were P10,000. Assume that Lewis was personally insolvent and could not contribute any assets to the partnership, while Keaton and Meador were both solvent. What amount of cash would Keaton have received from the distribution of partnership assets?

A. P34,000

B. P24,000

C. P30,000

D. P38,000

5. The Henry, Isaac and Jacobs Partnership was about to enter liquidation with the following account balances:

Cash P90,000

Noncash assets 300,000

Total P390,000

Liabilities P60,000

Keaton, capital 80,000

Lewis, capital 110,000

Meador, capital 140,000

Total P390,000

Estimated expenses of liquidation were P5,000. Henry, Isaac and Jacobs shared profits and losses in a ratio of 2:4:4. Before liquidating any assets, the partners determined the amount of cash available for safe payments. How should the cash be distributed?

A. In a ratio of 1:2 between Henry and Jacobs

B. P18,333 to Henry and P16,667 to Jacobs

C. P15000 to Henry and P10,000 to Jacobs

D. In a ratio of 1:2:2 among the partner

6. The first step in the liquidation process is to

A. Compute any net income (loss) up to the date of dissolution.

B. Convert noncash assets into cash.

C. Pay partnership creditors.

D. Allocate any gains or losses to the partners.

7. In a partnership liquidation, how are partner salary allocations treated?

A. Salary allocations take precedence over amounts due to partners with respect to their capital profits, bt not capital interests.

B. Salary allocations take precedence over creditor payments.

C. Salary allocations are disregarded.

D. Salary allocations take precedence over amounts due to partners with respect to their capital interests, but not profits.