The following statement of financial position is for the partnership of Cortes, Canda and Cena, who share profits

and
losses in the ration of 3:2:1 respectively.

Assets Liabilities and Capital

Cash 200,000 Liabilities 250,000
Other assets 400,000 Cena, Loan 50,000
Cortes, Capital 100,000
Canda, Capital 150,000
Cena, Capital 50,000
Total 600,000 Total 600,000

CASE 1
Cortes, Canda, and Cena
Statement of Liquidation

Cash Other Asset

Balances before Liquidation 200,000.00 400,000.00
a. Sales of Asset and distribution of gain 490,000.00 -400,000.00
Balances 690,000.00
b. Payment of Liabilities -250,000.00
Balances 440,000.00
c. Payment to Partner -440,000.00

The entries to record the liquidation process are:

Debit Credit
a. Realization of Asset and distribution of
gain on realization, 3:2:1

Cash 490,000.00
Other Assets 400,000.00
Cortes, Capital 45,000.00
Canda, Capital 30,000
Cena, Capital 15,000
Realization of Assets, Distribution of gain

b. Payment of Liabilities

Cash 250,000.00
Liabilities 250,000.00
Payment to liabilities
 c. Payment to partners

Cena, Loan 50,000.00

Cortes, Capital 145,000.00
Canda, Capital 180,000.00
Cena, Capital 65,000.00
Cash 440,000.00
Distribution of cash to partners

CASE 2
Cortes, Canda, and Cena
Statement of Liquidation

Cash Other Asset

Balances before Liquidation 200,000.00 400,000.00
January:
a. Sales of Asset and distribution of gain 260,000.00 -200,000.00
Balances 460,000.00 200,000.00
b. Payment of Liabilities -250,000.00
Balances 210,000.00 200,000.00
c. Payment to Partners (per schedule) -210,000.00
Balances 200,000.00
February:
d. Sales of Asset and distribution of gain 230,000.00 -200,000.00
Balances 230,000.00
e. Payment to Partners -230,000.00

Cortes, Canda, and Cena Partnership

Schedule to Accompany Statement of Liquidation
Amounts to be paid to Partners
Statement of Liquidation
January 31, 2015

3/6 2/6
Cortes Canda
Capital bances before cash distribution 130,000.00 170,000.00
Add loans
Total partner's interest 130,000.00 170,000.00

Restricted interest- possible loss of 200,000.00

if nothing is realized on remaining unsold
assets. -100,000.00 -66,666.67
Free interest- payment to partners 30,000.00 103,333.33
Payment to apply on:
Loan
Capital 30,000.00 103,333.33
Total cash distribution 30,000.00 103,333.33

The entries to record the liquidation process are:

Debit Credit
a. Realization of Asset and distribution of
gain on realization, 3:2:1

Cash 260,000.00
Other Assets 200,000.00
Cortes, Capital 30,000.00
Canda, Capital 20,000
Cena, Capital 10,000
Sales of asset and distribution of gain in realization

b. Payment of Liabilities

Cash 250,000.00
Liabilities 250,000.00
Payment to liabilities

c. First cash distribution to partners per

schedule

Cena, Loan 50,000.00

Cortes, Capital 30,000.00
Canda, Capital 103,333.33
Cena, Capital 26,666.67
Cash 210,000.00
Payment to partners

d. Realization of Asset and distribution of

gain on realization, 3:2:1

Cash 230,000.00
Other Assets 200,000.00
Cortes, Capital 15,000.00
Canda, Capital 10,000.00
Cena, Capital 5,000.00
Sales of asset and distribution of gain in realization

d. Second cash distribution to partners per

schedule

Cortes, Capital 115,000.00

Canda, Capital 76,666.67
Cena, Capital 38,333.33
Cash 230,000.00
Payment to partners
who share profits and Case I. All non-cash assets are realized fo

Case II. Non-cash assets are realized as fo

2015
January
February

Instructions: :
Case I Prepare the statement of liquidati
Case II Prepare the statement of liquidati
with schedule to accompany state
Case II Prepare the cash priority program
with the corresponding statement

Loan Capital
Liabilities Cena Cortes Canda Cena
250,000.00 50,000.00 100,000.00 150,000.00 50,000.00
45,000.00 30,000 15,000
250,000.00 50,000.00 145,000.00 180,000.00 65,000.00
-250,000.00
50,000.00 145,000.00 180,000.00 65,000.00
-50,000.00 -145,000.00 -180,000.00 -65,000.00
nda, and Cena
of Liquidation

Loan Capital
Liabilities Cena Cortes Canda Cena
250,000.00 50,000.00 100,000.00 150,000.00 50,000.00

30,000.00 20,000.00 10,000.00

250,000.00 50,000.00 130,000.00 170,000.00 60,000.00
-250,000.00
50,000.00 130,000.00 170,000.00 60,000.00
-50,000.00 -30,000.00 -103,333.33 -26,666.67
100,000.00 66,666.67 33,333.33

15,000.00 10,000.00 5,000.00

115,000.00 76,666.67 38,333.33
-115,000.00 -76,666.67 -38,333.33

1/6
Cena
60,000.00
50,000.00
110,000.00

-33,333.33
76,666.67

50,000.00
26,666.67
 76,666.67

Cortes, Canda, and Cena Partnership

Cash Priority Program
January 1, 2015

Cortes Canda
Capital balances before liquidation 100,000.00 150,000.00
Add: Loans
Total partner's interest 100,000.00 150,000.00
Divided by the profit & loss ratio 3/6 2/6
Loss absorption capacity 200,000.00 450,000.00

Allocation I: Cash to Cena reducing his loss absoption

balance to an amount reported for Canda: reduction of
150,000.00 requires payment of 1/6 x 150,000.00
200,000.00 450,000.00

Allocation II: Cash to Cena and Canda reducing their

loss absoption balance to an amount reported for
Cortes: reduction of 250,000.00 requires payment as
follows:
To Cena, 1/6 x 250,000.00
To Canda, 2/6 x 250,000.00 -250,000.00
200,000.00 200,000.00

Allocation III: Further cash distributions are made in the

profit and loss ratio

Installment Distribution
January 31, 2015
Amount Cortes
Cash available 210,000.00
Allocation I- Payable to Cena 25,000.00
Allocation II- Payable to Cena and Canda 125,000.00
60,000.00

Installment Distribution
February 28, 2015
Amount Cortes
Cash available 230,000.00
Allocation II. Balance
210,000.00 -150,000.00 60,000.00
Allocation III. Payment to Cortes, Canda, and Cena; 290,000.00 145,000.00
3:2:1 respectively
non-cash assets are realized for Php490,000.

n-cash assets are realized as follows:

BV Proceeds
200,000 260,000
200,000 230,000

pare the statement of liquidation using lumpsum liquidation. 10

pare the statement of liquidation using installment liquidation. 20
th schedule to accompany statement of liquidation
pare the cash priority program. 30
h the corresponding statements of installment liquidations
, Canda, and Cena Partnership
Cash Priority Program
January 1, 2015
Payment to
Cena Cortes Canda Cena Total
50,000.00
50,000.00
100,000.00
1/6
600,000.00

-150,000.00 25,000.00 25,000.00

450,000.00

-250,000.00 41,666.67 41,666.67

83,333.33 83,333.33
200,000.00 83,333.33 66,666.67 150,000.00

Canda Cena

25,000.00
83,333.33 41,666.67
83,333.33 66,666.67

Canda Cena
96,666.67 48,333.33