1.

A. Partners Red, White and Blue decided to liquidate their partnership. Their Statement of Financial Po shows the following: Assets Liabilities and Equity Cash P 500,000 Liabilities P 300,000 Noncash Assets 3,000,000 Red, Capital (30%) 1,100,000 White, Capital (40%) 1,350,000 Blue, Capital (30%) 750,000 Total Assets P3,500,000 Total Liabilities & Capital P 3,500,000 Red received P 800,000 cash in full settlement of his share in the partnership after payment of liquidation expenses of P 425,000