DOREMI PARTNERSHIP

DEBIT CREDIT
CASH P15,000
ACCOUNTS RECEIVABLE P20,000
INVENTORIES P65,000
LAND P50,000
BUILDING P100,000
FURNITURE P50,000
LOANS RECEIVABLE FROM Mi P10,000
ACCOUNTS PAYABLE P80,000
LOANS PAYABLE TO Do P10,000
Do, Capital (20%) P40,000
Re, Capital (30%) P60,000
Mi, Capital (50%) P50,000
ACCUM. DEPN. - BUILDING P40,000
ACCUM. DEPN. - FURNITURE P30,000

The following transactions and events occurred during the liquidation process:

June 10
Inventories and accounts receivable were realized at P20,000 and
P17,000 respectively.

June 20
P50,000 cash were used to pay outside creditors.

July 5 Land and building were sold for P100,000.

July 10 Liquidation expenses of P3,000 were paid.
July 15 Remaining outside creditors were paid from available cash.
July 20 Remaining available cash were distributed to partners.
August 10 Remaining noncash assets were sold for P5,000.
August 15 Paid to partners the remaining cash.
Required: Prepare the following: 
A. Schedule of safe payments

DoReMi Partnership
Safe Payment Schedule
(Schedule 1)
PARTNERS
Do Re Mi
Profit and Loss agreement 20% 30% 50%

Combined claims of partners

Less: Loss on realization
Balance
Less Maximum Loss Possible:
Unsold non-cash assets
Estimated Liabilities
Expected Liquidation Expenses
TOTAL
Capital Balances
Deficiency Absorption
Capital Balances
1st Payment of Cash

DoReMi Partnership
Safe Payment Schedule
(Schedule 2)
PARTNERS
Do Re Mi
Profit and Loss agreement 20% 30% 50%

Combined claims of partners

Less: Loss on realization
Balance
Less Maximum Loss Possible:
Unsold non-cash assets
Estimated Liabilities
Expected Liquidation Expenses
TOTAL
Capital Balances
Deficiency Absorption
Capital Balances
1st Payment of Cash
 DoReMi Partnership
Safe Payment Schedule
(Schedule 3)
PARTNERS
Do Re Mi
Profit and Loss agreement 20% 30% 50%

Combined claims of partners

Less: Loss on realization
Balance
Less Maximum Loss Possible:
Unsold non-cash assets
Estimated Liabilities
Expected Liquidation Expenses
TOTAL
Capital Balances
Deficiency Absorption
Capital Balances
1st Payment of Cash

B. Liquidation statement
C. Journal entries for the following:

1. Sale on June 10 and the distribution of gain or loss on realization. (Compound entry)

2. Payment to outside creditors on June 20.

3. Sale on July 5 and the distribution of gain or loss on realization. (Compound entry)

4. Actual liquidation expense paid on July 10.

5. Payment to outside creditor on July 15.

6. First cash distribution to the partners on July 20.

7. Sale on August 10 and the distribution of gain or loss on realization. (Compound entry)

8. Final payment to the partners on August 15.