FATHER SATURNINO URIOS UNIVERSITY

ACCOUNTANCY PROGRAM

Name: Date:
Instructor: Mr Lyndon P. Regodon, CPA
Advance Accounting I (Acctg 409B)

Partnership Liquidation

Problem 1
The following condensed balance sheet is presented for the partnership of CERCEI, JAIME and TYRION, who
share profits and losses in the ratio of 4:4:2, respectively:

Cash P 20,000 Liabilities P 50,000

Other assets 180,000 CERCEI, capital 37,000
JAIME, capital 65,000
TYRION, capital 48,000
Total P 200,000 Total P 200,000

Assume that the partners decided to liquidate the partnership. The first sale of noncash assets having a book
value of P90,000 realized P50,000 and all cash available after settlement with creditors was distributed. How
should the available cash have been distributed to each partner? __________

Problem 2
SUMMER, GHOST, LADY and NYMERIA share profits in the ration of 2:1:1:1. The partnership cannot meet its
obligations to creditors and dissolution is authorized on September 30, 2014. A Statement of Financial Position
for the partnership on this date shows balances as follows:

Assets Liabilities and capital

Cash P 90,000 Liabilities P 265,000
Other assets 400,000 NYMERIA, Loan 25,000
SUMMER, capital 50,000
GHOST, capital 50,000
LADY, capital 50,000
NYMERIA, capital 50,000
Total assets P 490,000 Total Liabilities and Capital P 490,000

The personal status of partners on this date is determined to be as follows:

Partners Personal assets Personal Liabilities

SUMMER P 250,000 P 150,000
GHOST 100,000 150,000
LADY 150,000 125,000
NYMERIA 200,000 250,000

The other assets of the partnership are sold and realized P120,000. Additional contributions by appropriate
parties in meeting the claims of firm creditors were made. The amount that will be paid to the personal
creditors of SUMMER would be?

Cash received by GHOST after liquidation is _________

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Problem 3
The following Statement of Financial Position was prepared for MYRCELLA, TOMMEN and JOFFREY Partnership
on March 31, 2008: (2:2:1)

Cash P 25,000 Liabilities P 52,000

Other assets 180,000 MYRCELLA, capital 40,000
TOMMEN, capital 65,000
JOFFREY, capital 48,000
Total assets P 205,000 Total Liabilities and capital P 205,000

The partnership is being liquidated by the sale of assets in instalments. The first sale of non-cash assets having a
book value of P90,000 realizes P50,000. The amount of cash each partner should receive in the first instalment
is: ________; __________; ___________

Using the same information and assuming P3,000 cash is withheld for possible liquidation expenses, how
much cash should JOFFREY receive?
a. 21,000 c. 3,000
b. 17,000 d. 18,000

Problem 4
As of December 31, 2008, the books of SLT Partnership showed a capital balances of SAMWELL- P40,000; LORAS-
P25,000; THEON- P5,000. The partners’ profit and loss ratio was 3:2:1, respectively. The partners decided to
dissolve and liquidate. They sold all the noncash assets for P37,000 cash. After settlement of all liabilities
amounting to P12,000, they still have P28,000 cash left for distribution. The loss on realization of the noncash
assets was:
a. 42,000 c. 45,000
b. 40,000 d. 28,000
The share of SAMWELL on the P28,000 cash for distribution was
a. 19,000 c. 18,000
b. 17,800 d. 28,000
The beginning balance of cash before liquidation is ____________.

The book value of the noncash assets sold was ______________.

Problem 5
J, K, L and M are partners, sharing earnings in the ration of 3:4:6:8. The balances of their capital amounts on
December w1, 2014 are as follows:
J P 1,000
K 25,000
L 25,000
M 9,000
P 60,000
The partners decided to liquidate and they accordingly convert the noncash assets into P23,200 cash. After
paying the liabilities amounting to P3,000, they have P22,200 to divide. Assume that a debit balance in any of
partner’s capital is uncollectible. The book value of the noncash assets amounted to:
a. 25,200 c. 61,000
b. 45,400 d. 63,000
The share of J in the loss upon conversion of the noncash assets into cash was:
a. 4,792 c. 5,400
b. 5,257 d. 1,000
When the P22,200 was divided, L received:
a. 6,342 c. 10,800
b. 8,320 d. 14,200

“Love is a partnership of two unique people who bring out the very best in each other and who
know that even though they are wonderful as individuals, they are even better together. “

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