PARTNERSHIP

1. Use the following information for the next two cases:

A and B decided to liquidate their partnership. The partnerships records show the following information:

Cash	-
Non-cash assets	80,000
Total assets	80,000
Liabilities	15,000
Loan payable to Partner A	10,000
Loan payable to Partner B	17,000
A, capital (80%)	20,000
B, capital (20%)	18,000
Total liabilities and equity	80,000

Case #1: Lump-sum liquidation

All the non-cash assets are sold for 50,000.

Requirement: Determine the amounts distributable to A and B in the liquidation.

Case #2: Installment liquidation

The non-cash assets are sold in installments. Settlement of partners claims shall be made in installments as cash becomes available. In the first sale, three-fourths (3/4) of the non-cash assets are sold for 45,000.

Requirement: Determine the amounts distributable to A and B after the first installment sale.