Problem 1: Assume the data for Gonzales Partnership had the condensed balance sheet just before liquidation on November 1, 20x4, thus, reports the balances as follows:

Assets Liabilities and Capital

Cash 20,000 Liabilities 10,000

Noncash assets 70,000 Q, loans 2,000

Q, capital (30%) 8,000

R, capital (50%) 40,000

S, capital (20%) 30,000

Total 90,000 90,000

Following are the data available before liquidating the partnership:

a. Prepaid expenses amounted to P7,000 were refunded to the partnership with the exception of P1,200 that was forfeited.

b. R agreed to personally take certain equipment having a P5,000 book value.

(The partners estimated its current value at P6,000)

c. S agreed to personally take certain furniture having a P3,000 book value. (The

partners estimated its current value at P2,500.)

d. The remaining noncash assets were realized at P27,000.

Required: Statement of realization and liquidation. Show all computations in good form.