PARTNERSHIP LIQUIDATION: ASSIGNMENT

1. Oliver, Patrick & Quincy LLP, is beginning liquidation. It has no cash, total liabilities of P60,000 including a
P10,000 loan payable to Patrick, and equal partners' capital account balances of P40,000. The income-sharing
ratio is 5:1:4, respectively. If a portion of the noncash assets with a carrying amount of P140,000 realizes
P120,000, the cash payment that Patrick receives

2. The balance sheet given below is presented for the partnership of Janet, Anton, and Millet:

Cash 60,000 Noncash Assets 80,000

Liabilities 80,000 Janet, Capital 80,000
Anton, Capital 30,000
Millet, Capital 20,000
Total 210,000 Total 210,000

The partners are share profits and losses in the ratio of 5:3:2, respectively. The partners agreed to dissolve the
partnership after selling the other assets for P50,000. On dissolution of the partnership, Janet should receive:

3. Anders, Barnes, and Crowley who share profits and losses in the ratio 5:3:2, respectively:

Cash 60,000
Other Assets 640,000
Liabilities 140,000
Anders, Capital 280,000
Barnes, Capital 28,000
Crowley, Capital 252,000
 
The partners decide to liquidate the partnership. The other assets are sold for P500,000. How should the
available cash be distributed?
4. Phil, Harry, and Bill are partners in a company that is being liquidated. The three partners have capital
account balances of P35,000, P28,000, and P27,000. In addition, the partnership previously loaned Bill P5,000
and Phil had loaned the partnership P10,000. Assuming the right of offset is applied, what is the net capital
position of (1) Phil, (2) Harry, and (3) Bill when the liquidation begins?

5. Rick, Mary, and Fran are partners in a company that is being liquidated. The three partners have capital
account balances of P46,000, P39,000, and P29,000. In addition, the partnership previously loaned Mary
P15,000 and Fran had loaned the partnership P10,000. Assuming the right of offset is applied, what is the net
capital position of (1) Rick, (2) Mary, and (3) Fran when the liquidation begins?

6. A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have been paid
and the partners are all insolvent. The partners capital accounts are as follows Harry P40,000, Landers
P30,000, and Waters P15,000. The partners share profits and losses 4:4:2. If the building is sols for P50,000,
how much cash will Harry receive in the final settlement?

7. The year-end balances sheet and residual profit and loss sharing percentages for the Lang, Maas, and Neal
partnership on December 31, 20X5, are as follows:

Cash 30,000 Accounts Payable 200,000

Loan to Lang 40,000 Loan from Maas 50,000
Other Assets 480,000 Lang, Capital (25%) 70,000
Maas, Capital (25%) 80,000
Neal, Capital (50%) 150,000
Total Assets 550,000 Total Liabilities and Equity 550,000

 The partners agree to liquidate the business and distribute cash when it becomes available. A cash
distribution plan for Lang, Maas and Neal partnership will show that cash available, after outside creditors are
paid, will initially go to
8. The Abrams, Bartle and Creighton partnership began the process of liquidation with the following balance sheet:
Cash P16,000   Liabilities P150,000
Noncash assets 434,000   Abrams, capital 80,000
      Bartle, capital 0,000
      Creighton, capital 130,000
Total P450,000   Total Liabilities and Equities P450,000
 
Abrams, Bartle and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be
P12,000. If the non-cash assets were sold for P234,000, what amount of the loss would have been allocated to
Bartle?

The Abrams, Bartle and Creighton partnership began the process of liquidation with the following balance sheet:
Cash P16,000   Liabilities P150,000
Noncash assets 434,000   Abrams, capital 80,000
      Bartle, capital 0,000
      Creighton, capital 130,000
Total P450,000   Total Liabilities and Equities P450,000

Abrams, Bartle and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be
P12,000. If the non-cash assets were sold for P234,000, what amount of the loss would have been allocated to
Bartle?

9. The Keaton, Lewis and Meador partnership had the following balance sheet just before entering liquidation:

Cash 10,000 Liabilities 130,000

Noncash Assets 300,000 Keaton, Capital 60,000
Lewis, Capital 40,000
Meador, Capital 80,000
Total 310,000 Total 310,000

 Keaton, Lewis and Meador share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for
P180,000. Liquidation expenses were P10,000. Assume that Lewis was personally insolvent and could not
contribute any assets to the partnership, while Keaton and Meador were both solvent. What amount of cash
would Keaton have received from the distribution of partnership assets?

10. The Henry, Isaac and Jacobs Partnership was about to enter liquidation with the following account
balances:
 Cash 90,000 Liabilities 60,000
Noncash Assets 300,000 Keaton, Capital 80,000
Lewis, Capital 110,000
Meador, Capital 140,000
Total 390,000 Total 390,000
 
Estimated expenses of liquidation were P5,000. Henry, Isaac and Jacobs shared profits and losses in a ratio of
2:4:4. Before liquidating any assets, the partners determined the amount of cash available for safe payments.
How should the cash be distributed?

11. liquidated and, prior to the liquidation process, the partnership balance sheet was as follows:

Cash 60,000 Gilligan, Capital 216,000

Noncash Assets 540,000 Skipper, Capital 240,000
Professor, Capital 144,000
Total 600,000 Total 600,000

After the partnership was liquidated and the cash was distributed, Skipper received P96,000 in cash in full
settlement of his interest. The liquidation loss must have been:

12. The Abrams, Bartle and Creighton partnership began the process of liquidation with the following balance
sheet:

Cash 16,000 Liabilities 150,000

Noncash Assets 434,000 Keaton, Capital 80,000
Lewis, Capital 90,000
Meador, Capital 130,000
Total 450,000 Total 450,000

Abrams, Bartle and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expense are expected to
be P12,000, After the liquidation expenses of P12,000 had been paid and the non-cash assets sold, Creighton
had a deficit of P8,000. For what amount were the non-cash assets sold?

3. Gonda, Herron and Morse is considering possible liquidation because Morse is insolvent. The partners have
the following capital balances: P60,000, P70,000 and P40,000, respectively and share profits and losses 30%,
45% and 25%, respectively. The partnership has P200,000 in assets that can be sold for P150,000. What is
the minimum that Morse's creditors would receive if they have filed a claim for P50,000?

4. Shrek, Donkey and Fiona are partners in SDF and share profits and losses in the ratio of 5:3:2, respectively.
The partnership has cash of P10,000 and noncash assets of P90,000 when they decide to liquidate. Liabilities
at the time of liquidation are P40,000 including a note payable to Fiona of P5,000. The partner capital accounts
are Shrek P40,000, Donkey P15,000 and Fiona P5,000. The non-cash assets of the partnership were sold for
P26,000. The liabilities other than the note payable to Fiona are paid. Fiona is personally insolvent. Shrek and
Donkey are not insolvent. Under the circumstances:

A. Shrek will receive a distribution in liquidation of P6,250.

B. Donkey will be required to contribute P4,200 to the partnership.

C. Shrek will receive a distribution in liquidation of P8,000.

D. Fiona will be required to contribute P2,800 to the partnership.

5. Taylor, Ulman &Vicor Partnership, whose partners share net income or loss equally, is in liquidation. Partner
Taylor, whose capita account had a debit balance of P3,000, paid a P4,000 trade account payable of the
partnership. The appropriate journal entry (explanation omitted) for the partnership is:

A. DR Cash 4,000
CR Taylor, Capital 4,000

B. DR Trade Accounts Payable 4,000

CR Taylor, Capital 4,000

C. DR Trade Accounts Payable 4,000

CR Loan Payable to Taylor 4,000

D. DR Trade Accounts Payable 4,000

CR Taylor, Capital 3,000
CR Ulman, Capital 500
CR Victor, Capital 500

16. White, Sands and Luke has the following capital balances and profit and loss ratios: P50,000 (30%),
P100,000 (20%), and P200,000 (50%). If the partnership is to be liquidated and P150,000 becomes available
for the partners immediately, who gets the money?
A. P0 White; P47,143 Sands; P102,857 Luke

B. P20,000 White; P57,143 Sands; P82,857 Luke

C. P10,000 White; P47,143 Sands; P92,857 Luke

D. P0 White; P57,143 Sands; P92,857 Luke

17. During the liquidation of Gym, Hob and Ing Partnership, Partner Hob withdrew equipment with a cost to the
partnership of P18,000, accumulated depreciation of P8,000, and a current fair value of P13,000. The partners
shared net income and losses equally. The net debit of Hob's capital account (including any gain or loss on
disposal of the equipment), assuming the noncash asset may be distributed safely to Hob, is:

18. During the liquidation of the partnership of Karr, Rice and Long, Karr accepts, in partial settlement of his
interest, machine with a cost to the partnership of P150,000, accumulated depreciation of P70,000, and a
current fair market value of P110,000. The partners share net income and loss equally. The net debit to Karr's
account (including any gain or loss on disposal of the machine) is

19. X, Y and Z have capital balances of P90,000, P60,000 and P30,000, respectively. Profits are allocated
35% to X, 35% to Y, and 30% to Z. The partners have decided to dissolve and liquidate the partnership. After
paying all creditors, the amount available for distribution is P60,000. X, Y and Z are all personally solvent.
Under the circumstances, Z will

A. Personally have to contribute an additional P36,000.

B. Personally have to contribute an additional P6,000.

C. Receive P18,000

D. Receive P30,000