Problem 5: The following balances are found in the books of THORNADO Partnership as of July 1, 2016 when the partners decide to sell the assets and liquidate the partnership. Accounts Payable P 420,000 Donny, Loan 50,000 Thor, Capital 80,000 Nap. Capita 180,000 Donny, Capital 140,000 Personal assets and liabilities of the partners are as follows: Assets Liabilities P/L ratio Thor P 240,000 P 230,000 1 Nap 500,000 600,000 Donny 450,000 420,000 Donny was instructed to act as partner in charge of the liquidation. It was agreed that distribution of cash to the partners would be made on the last day of each month during the liquidation period, provided there was sufficient cash on hand for this purpose The results of liquidation are summarized below: Cash Collected Book Value Accounts Liquidation Cash w/held for Payable Paid Expenses Paid future expenses August P 270,000 P 420,000 P 220,000 P 20,000 September 200,000 180,000 150,000 10,000 P 5,000 October 100,000 270,00 40,000 10,000 REQUIRED: 1. Statement of Liquidation with supporting schedule of safe payments. 2. Prepare a cash priority program , showing how cash will be distributed among the partners by installments as it becomes available. 3. Using the program above, prepare schedules summarizing the payments to be made to partners at the end of each month. Indicate what part of the payments are to be applied against loan balances and against capital balances. Note: Solution - Excel