PROBLEM #1

Capital and loan balances for partners Rosie, Ronie, Roxie who share profits 40%, 40%, and 20% respectively, are as follows just before liquidation:

Rosie, Loan 20,000 Ronie Capital 70,000

Rosie, Capital 30,000 Roxie Loan 30,000

Ronie, loan 20,000 Roxie Capital 40,000

Instructions:

Prepare statement/program to show how available cash would be distributed to the partners during the course of liquidation after creditors are paid in full. State which partner would receive the first cash available and at what point and to what degree

each of the remaining partners would participate in cash distributions.

Problem #2

Partners Alexis, Bang, and Cang have capital balances of P11,200; P 13,000; and P5,800, respectively and share profits in the ratio of 4:2:1.

Instructions:

l . Prepare schedule showing how available cash will be distributed to partners as it becomes available.

2. How much must the partnership realize on the sale of its assets if Alexis is to receive P 10,000 as final settlement?

3. If Alexis receives a total of P3,200 in cash, how much will Cang have received at this point?

4.If Alexis is personally insolvent and Bang receives a total of P 1,800 in final liquidation of the firm, what was the partnership loss on liquidation?

PROBLEM #3

John, Paul, and George, and Ringo are partners engaged in the business of palay trading under the name of Beatles Trading Co. They agreed to dissolve their partnership as of January 31,2001.

The partners agreed that distribution of cash to the partners were to be made on the last day of each month during liquidation starting Feb. 28, 2001, provided sufficient cash was available, Paul was designated as the partner in charge Of liquidation.

The partnership agreement provided that profits and losses were to be divided on the following basis: John, 20%; Paul, 30%, George, 30%; and Ringo, 20%.

The following was the condensed balance sheet of the firm as of January 31, 2001:

Assets

Cash100,320

Goodwill60,000

Other Assets133,530

Liabilities and Capital

Accounts Payable21,360

John, loan15,000

John Capital24,120

Paul capital96, 480

George, capital109, 020

Ringo, capital27,870

Transactions during liquidation other than cash distribution to partners are summarized as follows:

February March

Liquidation of assets with a book value of:

66,060 49,320

44,850 48,330

Paid to creditors on account 17,750 3,610

Paid liquidation expenses 8,220 7,380

Instructions:Prepare statement and supporting schedules showing the total amount of cash distributed to the partners at the end of February and March and the amounts received by each partner in each distribution.Assume that Paul made the distribution in such a manner that overpayment to any partner was avoided.

PROBLEM#4

The partners of ASC Partnership feel that it is no longer financially feasible to continue operations and have agreed to liquidate the partnership. The balance sheet on June 30, 2001, just prior to the start of liquidation is presented below.

Partners Alvin, Sammy and Cenon share profit and loss in the ratio of 5:3:2 respectively.

Assets Liabilities and Capital

Cash p 100,000 Liabilities P150,ooo

Noncash assets 650,000Loan payable to Alvin 25,000

Alvin, capital175,000

Sammy, capital300,000

Cenon, capital100,000

Total assets750,000Total liabilities &capital P750, 000

Instructions:

l . Prepare cash priority program showing how cash will be distributed to the partners as it becomes available.

2. If the first sale of noncash assets with a book value of P400,000 realizes P230,000 and available cash is distributed, determine the amount of cash to be distributed to each partner.