JUN, MAR, AND ROY PARTNERSHIP

Statement of Liquidation

Profit and Loss Ratio

Balances before Liquidation
July: Realization and Distribution of Loss
Balances
Payment of Liquidation Expenses
Balances
Payment of Liabilities
Balances
Payment to Partners (Schedule A)
Balances
August: Realization and Distribution of Gain
Balances
Payment of Liquidation Expenses
Balances
Payment to Partners (Schedule B)
Balances
September: Realization and Distribution of Loss
Balances
Offset Roy, Note Payable to Roy's Capital Deficiency
Balances
Final Payment to Partners

JUN, MAR, AND ROY PARTNERSHIP

Schedule A - Schedule of Safe Payments
To Accompany Statement of Liquidation
July 31, 2019

Capital Balances
Add: Note Payable Balance
Total Partner's Interest
Restricted Interests - possible loss of 108,000 assuming nothing
can be realized on the remaining non-cash assets
Balances
Restricted Interests - possible loss of 15,840 to Jun and Mar in the ratio
of 30:30 assuming Roy unable to meet his possible deficiency
Balances
Restricted Interests - possible loss of 7,800 to Mar assuming Jun
is unable to meet his possible deficiency
Free interest - amount to be paid to partner

Payment Applied on:

Note Payable
Capital

JUN, MAR, AND ROY PARTNERSHIP

Schedule B - Schedule of Safe Payments
To Accompany Statement of Liquidation
August 31, 2019

Capital Balances
Add: Note Payable Balance
Total Partner's Interest
Restricted Interests - possible loss of 73,000 assuming nothing
can be realized on the remaining non-cash assets
Balances
Restricted Interests - possible loss of 1,600 to Jun and Mar in the ratio
of 30:30 assuming Roy unable to meet his possible deficiency
Free interest - amount to be paid to partner

Payment Applied on:

Note Payable
Capital
MAR, AND ROY PARTNERSHIP
Statement of Liquidation

Notes Payable Capital

Cash Other Assets Liabilities
Roy Jun Mar Roy
30% 30% 40%
12,000 146,000 36,000 14,000 36,000 54,000 18,000
30,000 -38,000 -2,400 -2,400 -3,200
42,000 108,000 36,000 14,000 33,600 51,600 14,800
-3,600 -1,080 -1,080 -1,440
38,400 108,000 36,000 14,000 32,520 50,520 13,360
-36,000 -36,000
2,400 108,000 14,000 32,520 50,520 13,360
-2,400 -2,400
108,000 14,000 32,520 48,120 13,360
44,000 -35,000 2,700 2,700 3,600
44,000 73,000 14,000 35,220 50,820 16,960
-8,400 -2,520 -2,520 -3,360
35,600 73,000 14,000 32,700 48,300 13,600
-35,600 -10,000 -25,600
73,000 14,000 22,700 22,700 13,600
36,000 -73,000 -11,100 -11,100 -14,800
36,000 14,000 11,600 11,600 -1,200
-1,200 1,200
36,000 12,800 11,600 11,600
-36,000 -12,800 -11,600 -11,600

RSHIP
ayments
uidation

JUN MAR ROY

30% 30% 40%
32,520 50,520 13,360
14,000
32,520 50,520 27,360

-32,400 -32,400 -43,200

120 18,120 -15,840

-7,920 -7,920 15,840

-7,800 10,200

7,800 -7,800
 2,400

2,400

RSHIP
ayments
uidation

JUN MAR ROY

30% 30% 40%
32,700 48,300 13,600
14,000
32,700 48,300 27,600

-21,900 -21,900 -29,200

10,800 26,400 -1,600

-800 -800 1,600

10,000 25,600

10,000 25,600
Required 1. Prepare a statement of Liquidation using:
b. Cash Priority Program

Jun, Mar, and Roy Partnership

Cash Priority Program
July 01, 2019

Capital Balances
Jun
Capital Balances 36,000
Add: Note Payable Balance
Total Partners Interest 36,000
Divided by Profit and Loss Ratio 30
Loss absorption Capacity 120,000
Allocation 1: Cash to Mar to reduce his loss absorption balance to that
of Jun. Reduction of 60,000 requires payment of 18,000.
To Mar: 60,000 x 30/100 = 18,000
Balances 120,000
Allocation 2: Cash to Jun and Mar to reduce his loss absorption balance
to equal that of Roy. Reduction of 40,000 requires payment of 12,000.
-40,000
To Jun: 40,000 x 30/100 = 12,000
To Mar: 40,000 x 30/100 = 12,000
Balances 80,000
Allocation 3: According to P and L ratio

JUN, MAR, AND ROY PARTNERSHIP

Statement of Liquidation
July 01 to September 30 2019

Cash

Profit and Loss Ratio

Balances before Liquidation 12,000
July: Realization and Distribution of Loss 30,000
Balances 42,000
Payment of Liquidation Expenses -3,600
Balances 38,400
Payment of Liabilities -36,000
Balances 2,400
Payment to Partners (Schedule A) -2,400
Balances
August: Realization and Distribution of Gain 44,000
Balances 44,000
Payment of Liquidation Expenses -8,400
Balances 35,600
Payment to Partners (Schedule B) -35,600
Balances
September: Realization and Distribution of Loss 36,000
Balances 36,000
Offset Roy, Note Payable to Roy's Capital Deficiency
Balances 36,000
Final Payment to Partners -36,000

Jun, Mar, and Roy Partnership

Schedule A - Payment to Partners
To Accompany Statement of Liquidation
31-Jul-19

Amount

Cash Available 2,400

Allocation 1: Payable to Mar -2,400
Allocation 1: Balance

Payment applied on:

Capital

Jun, Mar, and Roy Partnership

Schedule A - Payment to Partners
To Accompany Statement of Liquidation
31-Jul-19

Amount

Cash Available 35,600

Allocation 1: Payable to Mar -15,600
Allocation 2: Payable to Jun and Mar 20,000
Allocation 2: Balance

Payment applied on:

Capital
Roy Partnership
ity Program
1, 2019

Capital Balances Cash Payments

Mar Roy Jun Mar Roy
54,000 18,000
14,000
54,000 32,000
30 40
180,000 80,000

-60,000 18,000

120,000 80,000

-40,000 12,000 12,000

80,000 80,000 12,000 30,000

30% 30% 40%

R, AND ROY PARTNERSHIP

ement of Liquidation
to September 30 2019

Notes Payable Capital

Other Assets Liabilities
Roy Jun Mar Roy
30% 30% 40%
146,000 36,000 14,000 36,000 54,000 18,000
-38,000 -2,400 -2,400 -3,200
108,000 36,000 14,000 33,600 51,600 14,800
-1,080 -1,080 -1,440
108,000 36,000 14,000 32,520 50,520 13,360
-36,000
108,000 14,000 32,520 50,520 13,360
-2,400
108,000 14,000 32,520 48,120 13,360
-35,000 2,700 2,700 3,600
 73,000 14,000 35,220 50,820 16,960
-2,520 -2,520 -3,360
73,000 14,000 32,700 48,300 13,600
-10,000 -25,600
73,000 14,000 22,700 22,700 13,600
-73,000 -11,100 -11,100 -14,800
14,000 11,600 11,600 -1,200
-1,200 1,200
12,800 11,600 11,600
-12,800 -11,600 -11,600

hip
tners
uidation

Payable to
Jun Mar Roy

2,400
2,400

2,400

hip
tners
uidation

Payable to
Jun Mar Roy

15,600
10,000 10,000
10,000 25,600

10,000 25,600
Required: 2. Prepare the necessary journal entries to record the liquidation process

Journal Entries - July DR CR

a.) Cash 30,000
Jun, Capital 2,400
Mar, Capital 2,400
Roy, Capital 3,200
Other Assets 38,000

b.) Jun, Capital 1,080

Mar, Capital 1,080
Roy, Capital 1,440
Cash 3,600

c.) Liabilities 36,000

Cash 36,000

d.) Mar, Capital 2,400

Cash 2,400

Journal Entries - August

e.) Cash 44,000
Other Assets 35,000
Jun, Capital 2,700
Mar, Capital 2,700
Roy, Capital 3,600

f.) Jun, Capital 2,520

Mar, Caapital 2,520
Roy, Capital 3,360
Cash 8,400

g.) Jun, Capital 10,000

Mar, Capital 25,600
Cash 35,600

Journal Entries - September

h.) Cash 36,000
Jun, Capital 11,100
Mar, Capital 11,100
Roy, Capital 14,800
Other Assets 73,000

i.) Roy, Note Payable 1,200

Roy, Capital 1,200
j.) Roy, Note Payable 12,800
Jun, Capital 11,600
Mar, Capital 11,600
Cash 36,000
Required: a.) Prepare a schedule showing how cash will be distributed to partners as it becomes available

Pisces, Gemini and Leo Partnership

Cash Priority Program
July 01, 2019

Capital Balances
Divided by Profit and Loss Ratio
Loss absorption Capacity
Allocation 1: Cash to Gemini to reduce his loss absorption balance to equal
that of Leo. Reduction of 4,900 requires payment of 1,400.
To Gemini: 4,900 x 2/7 = 1,400
Balances
Allocation 2: Cash to Gemini and Leo to reduce his loss absorption balances
to equal that of Pisces. Reduction of 21,000 requires payment as follows:
To Gemini: 21,000 x 2/7 = 6,000
To Leo: 21,000 x 1/7 = 3,000
Balances
Allocation 3: According to P and L ratio

Required: b.) Determine how much must the partnership realize on the sale of its non-cash assets if Pisces is to receive 1

Book value of Assets

Capital Balances of Pisces before Realization
Cash to be received by Pisces
Pisces' share on distribution of loss
divided by the profit and loss ratio of Pisces
Total Loss of Realization
Cash to be Realized in the Sale of Assets

Required: c.) If Pisces receives a total of 3,200 in cash, determine how much will Leo have received at this point.

Get Loss Absorption Balance Reduction = (3,200 / 4/7) =

Payment to Leo for Allocation 3 = (5,600 x 1/7) =
Total Cash Received by Leo = (3,000 + 800) =

Required: d.) If Pisces is personally insolvent and Gemini receives a total of 1,800 in final liquidation of the partnership,

Book Value of Assets

Allocation 1: Cash Payments to Gemini
Allcation 2: Total cash reduced by Allocation 1 divided by the share of Gemini
with Leo in the loss for Pisces' inventory (1,800 - 1,400 / 2/3)
Total Cash Available
Total Loss on Liquidation
it becomes available

mini and Leo Partnership

h Priority Program
July 01, 2019

Capital Balances Cash Payments

Jun Mar Roy Jun Mar Roy
11,200 13,000 5,800
4/7 2/7 1/7
19,600 45,500 40,600

-4,900 1,400

19,600 40,600 40,600

-21,000 -21000 6,000 3,000

19,600 19,600 19,600 7,400 3,000

4 2 1

n-cash assets if Pisces is to receive 10,000 as final settlement.

30,000
11,200
10,000
1,200
4/7
2,100 -2,100
27,900

have received at this point.

5,600
800
3,800

nal liquidation of the partnership, determine the firm's loss on liquidation.

30,000
1,400
600
 600

2,000 -2,000
28,000