The capital and loan balances of the partners of Liquid Company prior to liquidation on October 10, 2020

were as follows:

CAPITAL LOAN PROFIT LOSS & RATIO

Pete 30,000 2,500 30%

Hizon 40,000 none 40%

Diaz 25,000 10,000 30%

Required:

1. Prepare a Cash Priority Program

2. Based on the cash priority program, determine how much each of the partner will receive assuming:

a. Cash available for distribution is P4,000.

b. Cash available for distribution is P10,000.