PROBLEM #1

On June l, 2001, Brian and Carmina, partners of B and C Partnership, decided to liquidate their partnership. At the time of liquidation, the balance sheet accounts consisted of cash - P25,000; noncash assets - P600,000; liabilities P125,000; Brian, capital - P225,000; Carmina, capital - P275,000. Brian and Carmina share profits and losses in the ratio of 3:2, respectively. Brian is personally insolvent. Noncash assets were sold for P350,000.

Instructions: Prepare statement of partnership liquidation.

The partners of Lady, Candice and Cheryl Partnership have agreed to liquidate their partnership as of December 31, 2000. The partnership has cash of P 80,000, noncash assets of P 810,000, and liabilities of P270,000. The capital accounts of the

partners are: Lady, P60,000; Candice, P290,000; Cheryl, P270,000. The partners share profits and losses in the ratio 1:2:2 respectively. The partnership was able to sell all the noncash assets for P500,000 and paid P24,000 of liquidation expenses.

Instructions;

1. Prepare statement of liquidation assuming all partners are solvent.

2. Prepare statement of liquidation assuming the liabilities of P270,000 include a P70,000 note payable to Lady. All partners are solvent.

3. Prepare statement of liquidation assuming the noncash assets of P 810,000 include a note receivable from Candice in the amount of P110,000. The liabilities include a P70,000 note payable to Lady.

PROBLEM#2

The balance of the partnership of Cel and Paul as of December. 31, 2001 is shown below:

Cel and Paul

Balance Sheet

December 31, 2001

Assets Liabilities and Capital

Cash40,000 Liabilities264,000

Other Assets400,000Cel, Loan 36,000

Paul, Loan 40,000

Cel, Capital80,000

Paul, Capital20 000

The other assets were realized for P268,000, and all cash was disbursed. Division of profits and losses are:

CelPaul

Case 190%10%

Case 270%30%

Case 350%50%

Instructions: Prepare the partnership liquidation statement and journal entries to record the liquidation for each case.

Alexis, Bianca, Cassandra and Diana are partners with capitals of P11,000, P 10,300, P 13,700, and P9,000 respectively. Alexis has a loan balance of P2,000, Profits are shared in the ratio of 4:3:2:1 by Alexis, Bianca, Cassandra and Diana respectively. Assets are sold, liabilities are paid and cash of P12,000 remains.

Instructions: Show how should the cash of P 12,000 be distributed.