16. CC, PP, MM and HH are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are as follows:

CC, capital P60,000

PP, capital 27,000

MM, capital 43,000

HH, capital 20,000

Which of the following statements is true?

A. The first available P3,000 will go to MM.

B. The first available P2,000 will go to HH.

C. CC will collect a portion of any available cash before HH receives money.

D. CC will be the last partner to receive any available cash.

17. A partnership has gone through liquidation and now reports the following account balances:

Cash P16,000

Loan from JJ 3,000

WW, capital (2,000) (deficit)

JJ, capital (5,000) (deficit)

FF, capital 13,000

RR, capital 7,000

Profits and losses are allocated on the following basis: WW, 30 percent; JJ, 20 percent; FF, 30 percent; RR, 20 percent. Which of the following events should occur now?

A. FF should receive P10,600 and RR P5,400.

B. JJ should receive P3,000 cash because of the loan balance.

C. FF should receive P11,800 and RR P4,200.

D. JJ should receive P3,000, FF P8,800, and RR P4,200.

18. Allen, Branden & Caylin are in the process of liquidating their partnership. They have the following capital balances and profit and loss percentages:

Capital Balance Profit/Loss %

Allen 5,000 debit 20%

Branden 18,000 credit 50%

Caylin 6,000 credit 30%

The partnership balance sheet shows cash of P5,000, non-cash assets of P14,000, and no liabilities. Assuming no liquidation expenses, what safe payment could be made?

A. P1,000 to Allen, P2,500 to Branden, and P1,500 to Caylin

B. P18,000 to Branden only

C. P5,000 to Branden only

D. P5,000 split between Branden & Caylin by a ratio of 5/8 and 3/8, respectively.

19. The following account balances were available for the Perry, Quincy and Renquist partnership just before it entered liquidation:

Cash P90,000

Noncash assets 300,000

Total P390,000

Liabilities P170,000

Perry, capital 70,000

Quincy, capital 50,000

Renquist, capital 100,000

Total P390,000

Perry, Quincy and Renquist had shared profits and losses in a ratio of 2:4:4.Liquidation expenses were expected to be P8,000. Assume that Quincy was insolvent and could not contribute assets to cover any deficit in her capital account. For what amount must the non-cash assets have been sold, so that Renquist would have received some cash from the liquidation?

A. Any amount in excess of P50,000

B. Any amount in excess of P58,000

C. Any amount in excess of P108,000

D. Any amount in excess of P201,600

20. A local partnership was in the process of liquidating and reported the following capital balances:

Justice, capital (40% share of all profits and losses) P23,000

Zobart, capital (35%) 22,000

Douglass, capital (25%) (14,000)

Douglass indicated that the P14,000 deficit would be covered by a forthcoming contribution, However, the two remaining partners asked to receive he P31,000 that was then available. How much of this money should Justice receive?

A. P15,000

B. P15,553

C. P15,467

D. P17,333

36. Which of the following statements is true concerning the distribution of safe payments?

A. The distribution of safe payments assumes that any capital deficit balances will prove to be a total loss to the partnership.

B. The distribution of safe payments may only be made after all liabilities have been paid.

C. Safe payments are equal to the recorded capital balances of partners with positive capital balances.

D. In computing safe payments, partners with positive capital balances are assumed to absorb an equal share of any deficit balance(s)

37. A schedule prepared each time cash is to be distributed is called a(n)

A. Advance cash distribution schedule.

B. Loss absorption potential schedule.

C. Safe payment schedule.

D. Marshaling of assets schedule.

38. An advance cash distribution plan is prepared

A. To determine the order and amount of cash each partner will receive as it becomes available for distribution.

B. Each time a partnership asset is sold in an installment liquidation.

C. None of these.

D. Each time cash is distributed to partners in an installment liquidation.

39. In a partnership liquidation, the final cash distribution to the partners should be made in accordance with the:

A. Balances of the partners' capital accounts.

B. Partners' profit and loss-sharing ratio.

C. Ratio of capital contributions less withdrawals by the partners.

D. Ratio of the capital contributions by the partners