Problem 1:

Nico, Ricardo, Jack, & Esperanta are partners, sharing earnings in the ratio of 3:4:6:7, respectively. The
balance of their capital accounts on December 31, 2012 are as follows: Jack – P 23,500 ; Nico – P
6,000 ; Esperanta – P 9,250 ; Ricardo - P 22,250. The partners decided to liquidate and they
accordingly convert the noncash assets into P 25,000 cash. After paying the liabilities amounting to P
6,900, they have P 23,100 to divide. Assume that a debit balance in any partner’s capital is
uncollectible.

Determine the following:

1. The book value of the non cash assets.
2. The gain (loss) on realization.
3. The share of Ricardo in the gain (loss) upon conversion of the non cash assets into cash.
4. The amount of cash received by Jack.