CDE Partnership

Statement of Realization and Liquidation

Cash NCA Other Liabs Cyn Daph

₱ 10,000.00 ₱ 490,000.00 ₱ 165,000.00 ₱ 100,000.00 ₱ 160,000.00
July 31 Sale ₱ 63,000.00 -₱ 90,000.00 -₱ 6,000.00 -₱ 12,000.00
₱ 73,000.00 ₱ 400,000.00 ₱ 165,000.00 ₱ 94,000.00 ₱ 148,000.00
Liabilities -₱ 73,000.00 -₱ 73,000.00
₱ - ₱ 400,000.00 ₱ 92,000.00 ₱ 94,000.00 ₱ 148,000.00
Aug 4 Sales ₱ 124,000.00 -₱ 205,000.00 -₱ 18,000.00 -₱ 36,000.00
₱ 124,000.00 ₱ 195,000.00 ₱ 92,000.00 ₱ 76,000.00 ₱ 112,000.00
Liabilities -₱ 92,000.00 -₱ 92,000.00
Start of SSP/ CDP ₱ 32,000.00 ₱ 195,000.00 ₱ - ₱ 76,000.00 ₱ 112,000.00
Payment -₱ 32,000.00 -₱ 24,000.00 -₱ 8,000.00
₱ - ₱ 195,000.00 ₱ - ₱ 52,000.00 ₱ 104,000.00
Sept 5 Sale ₱ 60,000.00 -₱ 105,000.00 -₱ 10,000.00 -₱ 20,000.00
SSP No. 2 ₱ 60,000.00 ₱ 90,000.00 ₱ - ₱ 42,000.00 ₱ 84,000.00
Payment -₱ 60,000.00 -₱ 20,000.00 -₱ 40,000.00
₱ - ₱ 90,000.00 ₱ - ₱ 22,000.00 ₱ 44,000.00
October 1 Sale ₱ 45,000.00 -₱ 90,000.00 -₱ 10,000.00 -₱ 20,000.00
₱ 45,000.00 ₱ - ₱ - ₱ 12,000.00 ₱ 24,000.00
Return of Capital -₱ 45,000.00 -₱ 12,000.00 -₱ 24,000.00
₱ - ₱ - ₱ - ₱ - ₱ -

NOTE payables to partners and receivables from

must be lumped before constructing schedule
 Aug-04
Ei Schedule of Safe Payments 2 4 3 9
₱ 75,000.00 MAX LOSS Cyn Daph Ei
-₱ 9,000.00 ₱ 76,000.00 ₱ 112,000.00 ₱ 39,000.00
₱ 66,000.00 195,000 -₱ 43,333.33 -₱ 86,666.67 -₱ 65,000.00
₱ 32,666.67 ₱ 25,333.33 -₱ 26,000.00
₱ 66,000.00 Absorption -₱ 8,666.67 -₱ 17,333.33 ₱ 26,000.00
-₱ 27,000.00 Payment On Aug 4 ₱ 24,000.00 ₱ 8,000.00 ₱ -
₱ 39,000.00

₱ 39,000.00

₱ 39,000.00
-₱ 15,000.00
₱ 24,000.00 Sep-05
Schedule of Safe Payments 2 4 3 9
₱ 24,000.00 MAX LOSS Cyn Daph Ei
-₱ 15,000.00 ₱ 42,000.00 ₱ 84,000.00 ₱ 24,000.00
₱ 9,000.00 ₱ 90,000.00 -₱ 20,000.00 -₱ 40,000.00 -₱ 30,000.00
-₱ 9,000.00 ₱ 22,000.00 ₱ 44,000.00 -₱ 6,000.00
₱ - Absorption -₱ 2,000.00 -₱ 4,000.00 ₱ 6,000.00
Payment on Sept. 5 ₱ 20,000.00 ₱ 40,000.00 ₱ -
partner/s
Cash Distribution Plan
Capital Before Liquidation P&L ratio
Cyn ₱ 100,000.00 / 2/9
Daph ₱ 160,000.00 / 4/9
Ei ₱ 75,000.00 / 1/3

Cash Distribution Plan Other Liabs Cyn Daph Ei

First 165,000 100%
Next 20,000 100%
Next 90,000 33% 67%
Excess 22% 44% 33%
Maximum Loss Absorption Rank
₱ 450,000.00 1
₱ 360,000.00 2
₱ 225,000.00 3
Problem 1
Durand Price Russell
Net Income ₱ 200,000.00
Gain ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00 -₱ 15,000.00 Bonus to Price
₱ 185,000.00 B = 10%(Revenue - 1,0
Since Revenue is 1,100
Salaries ₱ 40,000.00 ₱ 20,000.00 ₱ 45,000.00 -₱ 105,000.00 B = 5,000
Bonus ₱ 5,000.00 -₱ 5,000.00
Bonus ₱ 2,692.31 ₱ 2,692.31 ₱ 2,692.31 -₱ 8,076.92
Interest ₱ 7,958.33 ₱ 11,416.67 ₱ 6,750.00 -₱ 26,125.00
₱ 40,798.08
Remainder ₱ 14,279.33 ₱ 10,199.52 ₱ 16,319.23 -₱ 40,798.08
₱ 69,929.97 ₱ 54,308.49 ₱ 75,761.54 ₱ -

Let X = net income exc. gain on sale

75T - (20T/3) - 40T + 7958.33+[(.1X-15T)/1.3] + .35%[X-105T-5T-3[(.1X-15T)/1.3]

B = .1(X-150T-3B)
B=(.1X-15T)/1.3

X = 194831.95
X + Gain on Sale = 214,831.95
Bonus to Price
B = 10%(Revenue - 1,000,000)
Since Revenue is 1,100,000
B = 5,000
Bonus to all
B = 10%(185T - 3B - 150T)
note: used 185 cos of item no. 6
no deduction of 5k since the all such bonuses only
pertain to the current bonus.

B = 2692.31

WAVE Cap
Durand 75,000 1 ₱ 75,000.00
10,000 0.58 ₱ 5,833.33
-5,000 0.25 -₱ 1,250.00
₱ 79,583.33

Price 125,000 1.00 ₱ 125,000.00

-5000 0.92 -₱ 4,583.33
-5000 0.75 -₱ 3,750.00
-5000 0.5 -₱ 2,500.00
₱ 114,166.67

Russell 40,000 1.00 ₱ 40,000.00

30,000 0.92 ₱ 27,500.00
₱ 67,500.00
 Original Income Allocation - mistakes
Problem 2 30% 30% 40%
2007 C D E
Net Income ₱ 44,000.00
Bonus ₱ 4,000.00 -₱ 4,000.00
₱ 40,000.00
Remainder ₱ 12,000.00 ₱ 12,000.00 ₱ 16,000.00 -₱ 40,000.00
₱ 16,000.00 ₱ 12,000.00 ₱ 16,000.00 ₱ -

2008 35% 35% 30%

NI ₱ 42,000.00
Bonus ₱ 3,818.18 -₱ 3,818.18
₱ 38,181.82
Remainder ₱ 13,363.64 ₱ 13,363.64 ₱ 11,454.55 -₱ 38,181.82
₱ 17,181.82 ₱ 13,363.64 ₱ 11,454.55 ₱ -

Corrected Income Allocation

30% 30% 40%
2007 C D E
Net Income ₱ 48,400.00
Bonus ₱ 4,400.00 -₱ 4,400.00
₱ 44,000.00
Remainder ₱ 13,200.00 ₱ 13,200.00 ₱ 17,600.00 -₱ 44,000.00
₱ 17,600.00 ₱ 13,200.00 ₱ 17,600.00 ₱ -

2008 35% 35% 30%

NI ₱ 25,000.00
Bonus ₱ 2,272.73 -₱ 2,272.73
₱ 22,727.27
Remainder ₱ 7,954.55 ₱ 7,954.55 ₱ 6,818.18 -₱ 22,727.27
₱ 10,227.27 ₱ 7,954.55 ₱ 6,818.18 ₱ -

C D E
25000 30000 28000
2007 ₱ 1,600.00 ₱ 1,200.00 ₱ 1,600.00
 2008 -₱ 6,954.55 -₱ 5,409.09 -₱ 4,636.36
Error -₱ 5,000.00
₱ 14,645.45 ₱ 25,790.91 ₱ 24,963.64
 2007 2008
₱ 44,000.00 ₱ 42,000.00
2007 a Unrecorded Depreciation -₱ 5,000.00
b 2007 Prepaid Expense ₱ 3,000.00 -₱ 3,000.00
c no adjustments - doesn’t affect Net Income
d 2008 Accrued Expense -₱ 2,000.00 ₱ 2,000.00
e Fees ₱ 8,400.00 -₱ 8,400.00
2008 a Inventory Overstatement ₱ 4,000.00
b Accrued Expenses -₱ 8,600.00
c Interest Incom -₱ 3,000.00
₱ 48,400.00 ₱ 25,000.00
BI + Purch -EI = COGS
Purch Overstated
EI No effect
= COGS Overstated
Thus NI was understated, so
add back

2008 /c
Did not do the reversing
entry, so income was
overstated
Problem 3
BV FV
Assets ₱523,000.00 ₱437,000.00
Liabs -₱323,000.00 -₱329,000.00
₱200,000.00 ₱108,000.00 ₱ 92,000.00

Deduction Remaining Bal

4S ₱ 80,000.00 -₱36,800.00 ₱ 43,200.00
4G ₱ 80,000.00 -₱36,800.00 ₱ 43,200.00
2V ₱ 40,000.00 -₱18,400.00 ₱ 21,600.00
-₱92,000.00 ₱ 108,000.00

1V ₱ 21,600.00 ₱ 0.50 ₱ 10,800.00

2 Old Capital ₱108,000.00 60% ₱ 180,000.00 since 40% ang invest ni maria
Interest 40% so 60% lang ang sa current
Maria, Invest ₱ 72,000.00

3 Old Capital ₱108,000.00

Maria ₱ 60,000.00
₱168,000.00
40%
₱ 67,200.00 ₱ 60,000.00 ₱ 7,200.00 allocated as bonus to new partner

0.40 S ₱ 2,880.00
0.40 G ₱ 2,880.00
0.20 V ₱ 1,440.00

Shawie Capital ₱ 43,200.00

Adjustment -₱ 2,880.00
₱ 40,320.00

4 Paid ₱ 50,000.00 Adjustment

Capital ₱ 21,600.00 S ₱ 14,200.00
Adjustment ₱ 28,400.00
G ₱ 14,200.00
Guy, Cap ₱ 43,200.00
₱ 29,000.00

5 New Cap Bal ₱ 50,000.00

Existing ₱ 43,200.00
B to remaining ₱ 6,800.00 this is 2/3 of the bonus

total bonus ₱ 10,200.00

₱ 43,200.00
₱ 33,000.00
 1
Zalora Inventory ₱ 300,000.00
Lazada Cash ₱ 250,000.00
Land ₱ 1,250,000.00
₱ 1,800,000.00

Capital Share upon Formation

Zalora 40% ₱ 720,000.00
Lazada 60% ₱ 1,080,000.00

Since there was an agreement that the total contribution will be shared 40-60, despite their actual contribution

40% 60%
2010 Zalora Lazada
Net Income ₱ 100,000.00
Interest ₱ 15,000.00 ₱ 22,500.00 -₱ 37,500.00
Salaries ₱ 40,000.00 -₱ 40,000.00
₱ 22,500.00
Remaining ₱ 9,000.00 ₱ 13,500.00 -₱ 22,500.00
₱ 64,000.00 ₱ 36,000.00 ₱ -

Capital Zalora Lazada

Beg, Cap ₱ 720,000.00 ₱ 1,080,000.00
Income ₱ 64,000.00 ₱ 36,000.00
Drawings -₱ 25,000.00 -₱ 25,000.00
Cap, Dec 31 2010 ₱ 759,000.00 ₱ 1,091,000.00

40% 60%
2011 Zalora Lazada
Net Income 150,000
Salaries ₱ 48,000.00 -₱ 48,000.00
Interest ₱ 18,975.00 ₱ 27,275.00 -₱ 46,250.00
₱ 55,750.00
Remaining ₱ 22,300.00 ₱ 33,450.00 -₱ 55,750.00
₱ 89,275.00 ₱ 60,725.00

Capital Zalora Lazada

Beg, Cap ₱ 759,000.00 ₱ 1,091,000.00
Income ₱ 89,275.00 ₱ 60,725.00
Drawings -₱ 30,000.00 -₱ 30,000.00
Cap, before reval ₱ 818,275.00 ₱ 1,121,725.00
50,000 Land Revaluation ₱ 20,000.00 ₱ 30,000.00
Cap, Jul 1 2011 ₱ 838,275.00 ₱ 1,151,725.00

Old Capital ₱ 1,990,000.00

New 800,000
 ₱ 2,790,000.00
Interest 25%
Capital Amount ₱ 697,500.00
Investment ₱ 800,000.00
Adjustment ₱ 102,500.00

Zalora Lazada Sephora

Cap, Jul 1 2011 ₱ 838,275.00 ₱ 1,151,725.00
Adjustment ₱ 41,000.00 ₱ 61,500.00
₱ 879,275.00 ₱ 1,213,225.00 ₱ 697,500.00

45% 30% 25%

2011 Dec Zalora Lazada Sephora
Net Income
Interest ₱ 21,981.88 ₱ 30,330.63 ₱ 17,437.50
Salaries ₱ 12,000.00 ₱ 12,000.00 ₱ 12,000.00

Remainder ₱ 19,912.50 ₱ 13,275.00 ₱ 11,062.50

₱ 53,894.38 ₱ 55,605.63 ₱ 40,500.00

Zalora Lazada Sephora

Cap, Jul 1 2011 ₱ 879,275.00 ₱ 1,213,225.00 ₱ 697,500.00
Adjustment ₱ 53,894.38 ₱ 55,605.63 ₱ 40,500.00
Withdrawal -₱ 12,000.00 -₱ 12,000.00 -₱ 12,000.00
Capital, Dec 31 2011 ₱ 921,169.38 ₱ 1,256,830.63 ₱ 726,000.00
 BEGINNING CAPITAL = BEG CAP DURING THE YEAR, NOT THE ORIGINAL CAPITAL CONTRIB

d 40-60, despite their actual contribution

₱ 150,000.00
-₱ 69,750.00
-₱ 36,000.00
₱ 44,250.00
-₱ 44,250.00