Problem #13 Preparation of Journal Entries for Partnership Liquidation Tugade, Masinsin and Biore are all famous athletes who have been operating a sports memorabilia store for many years. The partnership decided to liquidate its operation rather than sell the business because they are each about to retire and want to go their separate ways. They have been sharing profits in the ratio of 40% to Tugade, 40% to Masinsin, and 20% to Biore. The trial balance for their business on Jan 1, 2018 follows: Trial Balance Cash January 1, 2018 Accounts Receivable P42,000 Allowance for Uncollectible Accounts 189,600 Merchandise Inventory P11,100 Prepaid Insurance 293,100 Land 9,000 Office Equipment 120,000 31,500 Accu. Depreciation Office Equipment 10,500 Machinery 81,600 Accu. Depreciation-Machinery 32,100 Building 375,000 Accu. Depreciation-Building 112,500 Notes Payable 120,000 Accounts Payable 220,500 Mortgage Payable 240,000 Tugade, Capital 135,000 Masinsin, Capital 60,000 200,100 Biore, Capital P1,141,800 Totals P1,141,800 In January 2018, the events took place during the process of liquidating the partnership: Jan. 6 Accounts receivable of P151,500 are collected, and the allowance for uncollectible accounts is written off the books. 9 Merchandise inventory is sold for P160,500 11 A refund on the prepaid insurance is expected totaling P3,000. 14 Property and equipment were sold lump sum to Sibug Company for P111,000. The mortgage on the building was also transferred to Sibug. 20 The remaining creditors were paid in full. 20 The deficit in Masinsin's capital account was absorbed by Tugade and Biore. 20 The deficit in Tugade's capital account was absorbed by Biore. 24 The remaining partnership cash is distributed to Biore. Required: Prepare the journal entries to record the transactions. Allocate any gain or loss on realization to the partners' capital accounts at the time of the transaction. It is to assumed that any partner with a capital deficiency is insolvent and will not be able to Contribute any personal assets to cover it