1. Arnel, Floyd, and Danny are partners who share profits and losses in the ratio of 1:3:4, respectively. Financial position as at December 31, 2018 showed the following:

Cash P240, 000

Noncash Assets (net) P1, 100, 000

Floyd, Drawing P120, 000

Danny, Drawing P90,000

Income Summary P300, 000

TotalP1, 850,000

Liabilities P650,000

Arnel, Capital P300,000

Floyd, Capital P540, 000

Danny, Capital P360,000

TotalP1, 850, 000

Due to a series of disagreements, they decided to liquidate the partnership on January 1, 2019. The non cash assets were sold for P370, 000. Personal assets, on this date, other than partnership interests showed the following:

Personal Assets.

Arnel.P2, 000, 000

Floyd.P7, 500, 000

Danny.P4, 000, 000

Personal Liabilities

Arnel.P1, 950, 000

Floyd.P7, 750, 000

Danny.P3, 500, 000

Direction:

a.Distribute looked by closing income Summary to drawing accounts.

b. Update partner's equity by closing the drawing accounts to capital accounts.

c.Statement of Liquidation.

d. liquidation entries.