PARTNERSHIP LIQUIDATION

1. The liabilities and capital balances of the partners before the sale of the assets and
payments of liabilities including personal assets and liabilities of the partners were:

Partnership Personal Assets Personal Liabilities

Cash P10,000

Liabilities 70,000

Kath 65,000 P1,200,000 P1,500,000

Pau 20,000 2,500,000 2,490,000

Jas 15,000 3,000,000 3,200,000

After the assets were sold the capital balances of the partners were as follows: Kath,
P48,000; Pau, P12,000; and Jas, (P10,000)

● How much cash was received by Jas in the final settlement?

P0

● What is the P/L ratio of Jas? [34% - Kath; 16% - Pau]

50%

● How much is the gain/(loss) from sale of non-cash assets?

(P50,000)

● How much is the non-cash assets?

160,000

2. Jack and Beans, who share profits and losses in the ratio 3:7, decided to liquidate their
Talk Partnership. The partner’s capital balances are P300,000 and P190,000,
respectively.

● Before the realization of non-cash assets, the partnership has a zero balance in
its cash account and a P200,000 balance in its liabilities. If on final settlement of
partners’ claims Jack received P261,000, how much was the net proceeds from
the sale of non-cash assets?
P560,000

● If all partnership assets and liabilities are realized and settled at their carrying
amounts, how much would Beans receive from liquidation?
P190,000
● If all partnership assets are realized and all liabilities are settled, the partnership
has remaining cash of P120,000, how much would Beans receive from the
liquidation?
None

● If on final settlement of partners’ claims Beans received P99,000, how much did
Jack receive?
P261,000

● The partnership has total liabilities of P200,000. If all partnership assets are
realized for P500,000, how much would Jack receive from the liquidation?
243,000