Problem 9:

AL, AC, GF, & EM are partners engaged in the business of selling product XY. They agreed to dissolve
their partnership as of January 31, 2012.

The partners agreed that distribution of cash to the partners were to be made on the last day of each
month during liquidation staring Feb. 29, 2012. Provided sufficient cash was withheld. EM was
designated as the partner in charge of liquidation.

The partnership agreement provided that profits and losses were to be divided on the following basis:
AL, 20%; AC, 30%; GF, 30%; and EM, 20%.

The following was the condensed statement of financial position of the firm as of Jan. 31, 2012:

Assets Liabilities and Capital

Cash P 100,320 Accounts payable P 21,360
Other assets 193,530 AL, loan 15,000
AL, Capital 24,120
AC, Capital 96,480
GF, Capital 109,020
EM, Capital 27,870
TOTAL ASSETS: P 293,850 TOTAL LIABS & EQUITY P 293,850

Transactions during liquidation other than cash distribution to partners are summarized as follows:
February March April
Liquidation of assets with a
book value of:
P 52,010 P 39,210
P 78,880 P 90,520
--remainder-- P 73,100
Paid to creditors on
account P 10,250 11,110 ---
Paid liquidation expense P 9,250 10,220 8,690

Questions to answer:
1. How much cash did AC received from the February distribution?
2. How much cash did EM received from the February distribution?
3. What is the cash balance after the initial distribution?
4. What is the balance of AL’s interest in the partnership after the initial distribution?
5. How much cash did EM received from the March distribution?
6. How much cash did AL received from the March distribution?
7. What is the balance of GF’s capital after the 2nd distribution?
8. What is the balance of EM’s capital just before the final distribution of cash?
9. Compute the total cash received by GF throughout the liquidation.