Subject: Special Transactions

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Partnership Liquidation

Answers:

1. C 2.B 3.C 4. D 5. A 6.B 7. C 8.A 9.A

W LUMP SUM LIQUIDATION On December 31. 2018 . A. B. and C decided to liquidate their partnership. The statement of nancial position accounts consisted of the following prior to liquidation: Cash P100,000 Loan to B P25.000 Other assets P1 ,075.000 Liabilities to outsiders P603.000 Due to C P32,000 A, Capital P216.000 B, Capital P187.000 C, Capital P162.000 A, B. and C share prots and losses in the ratio 014:4:2. respectively. CASE 1: The partnership was able to sell all the other assets for P1. 120. 000 and paid liquidation expenses of P1 0. 000. 1. How much cash should A. B, and C receive? A B C A. 230.000 176.000 169.000 B. 220.000 191.000 196,000 C. 230.000 176.000 201.000 D. 220.000 191.000 164.000 CASE 2: The partnership was able to sell all the other assets for P500. 000 and paid liquidation expenses of P5. 000. A and C are personally solvent while B is personally insolvent. 2. How much cash should C receive? A. 78.000 B. 54.667 C. 22.667 0.46.000 CASE 3: 8 received a total of P161000 and liquidation expenses of P1 0. 000 were paid. 3. How much is the amount of gain or loss on realization of other assets? A. 2.500 gain B. 2.500 loss C. 7.500 gain D. 7,500 loss 4. How much is the total proceeds from sale of other assets? A. 1.077.500 B. 1.072.500 C. 1.067.500 0. 1,082,500 5. How much cash did A and C received? A. 215,000; 193.500 B. 193.500: 215.000 0. 215.000; 161.500 D. 161.500; 215.000 CASE 4: A received a total of P26. 000 and liquidation expenses of P2.000 were paid. Assume all partners are insolvent. 6. How much is the loss on liquidation? A. 475.000 8. 447.000 C. 445.000 D. 473.000 7. How much is the total proceeds from sale of other assets? A. 628,000 B. 600.000 C. 630.000 D. 602.000 8. How much cash did C received? A. 99.000 8.104.600 C. 67.000 0. 0 CASE 5: A received a total of P26. 000 and liquidation expenses of P2. 000 were paid. Assume all partners are solvent. 9. How much is the loss on liquidation? A. 475.000 B. 447.000 C. 445.000 D. 473.000