CIPRES ADORA R Drill On Partnership Liquidation

CIPRES, ADORA R.
BS ENTREPRENEURSHIP
Ballada and Ballada
A. Partners Baldecir and Magallanes each have a P300,000 capital balance
and share profits and losses in a 3:1 ratio, respectively. Cash equals
P100,000, non-cash assets equal P1,000,000, and liabilities equal
P500,000.
1. If the non-cash assets are sold for P600,000, then Magallanes’ capital
account will:
a. Decrease by P100,000
b. Decrease by P200,000
c. Decrease by P300,000
d. Increase by P150,000
Cash Non Cash Liabilities Baldecir, Magallanes,
Asset Capital Capital
Balance before 100, 000 1,000,000 500,000 300,000 300,000
Liquidation
Sales of Assets 600,000 (1,000,000) (300,000) (100,000)
Balance 700,000 0 200,000
Payment of Liabilities (500,000) (500,000)
Balance 200,000 0 200,000
Payment to Partners (200,000) (200,000)
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2. If the non-cash assets are sold for P400,000, and both partners agreed
to make up for any capital deficits with personal cash contributions,
Magallanes eventually will receive cash of.
a. P0 b. P100,000 c. P150,000d. P200,000
Non Cash Baldecir, Magallanes

Cash Liabilities
Assets Capital , Capital
Balance before
P 100,000 1,000,000 500,000 300,000 300,000
liquidation
Sales of Non Cash
Assets and (1,000,000
400,000 - (450,000) (150,000)
Distribution of )
Losses
Balances P 500, 000 500,000 (150,000) 150,000
Payment of
Liabilities to (500,000) (500,000)
Outsiders
Balances P0 (150,000) 150,000
Additional
Investments by 150,000 150,000
Baldecir
Balance 150,000 150,000
3. If the non-cash assets are sold for P500,000, and each partner is
personally insolvent, Magallanes eventually will receive cash of
a. P0 b. P100,000 c. P125,000d. P175,000
Non Cash Baldecir, Magallanes

Cash Liabilities
Assets Capital , Capital
Balance before
P 100,000 1,000,000 500,000 300,000 300,000
liquidation
Sales of Non Cash
Assets and (1,000,000
500,000 - (375,000) (125,000)
Distribution of )
Losses
Balances P 600,000 500,000 (75,000) 175,000
Payment of
Liabilities to (500,000) (500,000)
Outsiders
Balances P 100,000 (75,0000 175,000
Additional
Investments by 75,000 (75,000)
Magallanes
Balance P 100,000 P 100,000
B. Partners Escudero and Selisana each have a P450,000 capital balance
and share profits and losses in a 3:2 ratio, respectively. Cash equals
P150,000, non-cash assets equal P1,500,000, and liabilities equal
P750,000.
1. If the non-cash assets are sold for P1,000,000, the change in Selisana’s
capital account will be
a. An increase of P500,000
b. A decrease of P250,000
c. A decrease of P200,000
d. An increase of P400,000
Non Cash Escudero Selisana,
Cash Liabilities
Assets Capital Capital
Balance 150,000 1,500,000 750,000 450,000 450,000
before
Liquidation
Sales of 1,000,000 (1,500,000 (300,000) (200,000)
Assets )
Balance 1,150,000 750,000 150,000 250,000
Payment of (750,000) (750,000)
Liabilities
Balance 400,000 0 150,000 250,000
Payment (400,000) (150,000) (250,000)
to Partners
2. If the non-cash assets are sold for P700,000 and each partner is
personally insolvent, upon liquidation Selisana will receive a cash
distribution of
a. P100,000 b. P50,000 c. P130,000d. P0
Cash Liabilities
Balance 150,000 1,500,000 750,000 450,000 450,000
before
Liquidation
Sales of 700,000 (1,500,000 (480,000) (320,000)
Assets )
Balance 850,000 750,000 (30,000) 130,000
Payment of (750,000) (750,000)
Liabilities
Balance 100,000 (30,000) 130,000
Payment 100,000 100,000
to Partners
3. If the non-cash assets are sold for P700,000 and both partners agree to
make up for any capital deficits with personal cash contributions, upon
liquidation, Selisana will receive a cash distribution of
a. P100,000 b. P50,000 c. P130,000d. P0
Cash Liabilities
Balance before 150,000 1,500,000 750,000 450,000 450,000
Liquidation
Sales of Assets 700,000 1,500,000 (480,000) (320,000)
Balance 850,000 750,000 30,000 130,000
Payment of (750,000) (750,000)
Liabilities
Balance 100,000 0 (30,000) 130,000
Payment to Partners 30,000 30,000
C. As of Dec. 31, 2020, the books of AEZ Partnership showed capital

balances of Amurao, P40,000; Estoque, P25,000; Zulueta, P5,000. The
partners’ profit and loss ratio was 3:2:1, respectively. The partners
decided to liquidate and they sold all non-cash assets for P37,000. After
settlement of all liabilities amounting to P12,000, they still have cash of
P28,000 left for distribution. Assuming that any capital deficiency is
uncollectible, the share of Amurao in the distribution of cash would be:
a. P17,000 b. P17,800 c. P18,000 d. P19,000
Cash Non Cash Liabilitie Amurao Estoque Zulueta
Asset s Capital Capital Capital
Balance before 3,000 79,000 12,000 40,000 25,000 5,000
Liquidation
Sales of Assets 37,000 (79,000) (21,000) (14,000) (7,000)
Balance 40,000 12,000 19,000 11,000 (2,000)
Payment of (12,000) (12,000)
Liabilities
Balance 28,000 19,000 11,000 (2,000)
Defficiency (1200) (800) 2,000
Uncollectable
Payment to (28,000) (17,800) (10,200)
Partners
D. Ramos, Seechua and Tria are partners in a textile distribution business,

sharing profits and losses equally. On Dec. 31, 2019, the partnership
capital and the partners’ drawing were as follows:
Ramos Seechu Tria Total
a
Capital P100,00 P80,00 P300,00 P480,00
0 0 0 0
Drawin 60,000 40,000 20,000 120,00
g 0
The partnership was unable to collect on its trade receivables, and it

was forced to liquidate. The operating profits for 2019 amounted to
P72,000, and was all exhausted including the partnership assets.
Unsettled creditors' claim at Dec. 31, 2020 amounted to P84,000.
Seechua and Tria have substantial private resources, but Ramos has no
available free assets. The final cash distribution to Tria was
a. P162,000 b. P108,000 c. P84,000 d. P78,000
Ramos Seechua Tria

Capital Balances 64,000 64,000 304,000
Absorption of loss (172,000) (172,000) (172,000)
Balances (108,000) (108,000) 132,000

Additional Investment 108,000
Balance (108,000) 0 132,000
Additional Investment 108,000 (54,000) (54,000)
of Ramos and
Absorption of Loss for
Ramos
Additional Investment 54,000
of Seechua
Balances 78,000
E. After operating for five years, the books of the partnership of Lopez
and Mendez showed the following balances:
Net Assets P130,000
Lopez, Capital 85,000
Mendez, Capital 45,000
If liquidation takes place at this point and the net assets are realized
at book value, the partners are entitled to:
a. Lopez to receive P90,000 and Mendez to receive P40,000
b. Lopez to receive P97,500 and Mendez to receive P32,500
c. Lopez to receive P85,000 and Mendez to receive P45,000
d. Lopez to receive P65,000 and Mendez to receive P65,000
F. Mactal, Macadang and Pangan are partners with capital balances of

P350,000, P250,000 and P350,000 and sharing profits 30%, 20% and
50%, respectively. Partners agreed to dissolve the business and upon
liquidation, all of the partnership assets are sold and sufficient cash is
realized to pay all the claims except one for P50,000. Pangan is
personally insolvent, but the other two partners are able to meet any
indebtedness to the firm. On the remaining claim against the
partnership, Mactal is to absorb:
a. P40,000 b. P15,000 c. P30,000 d. P25,000
50,000 x 3/5 = 30,000
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CIPRES, ADORA R.

Non Cash Baldecir, Magallanes

Non Cash Baldecir, Magallanes

C. As of Dec. 31, 2020, the books of AEZ Partnership showed capital

D. Ramos, Seechua and Tria are partners in a textile distribution business,

The partnership was unable to collect on its trade receivables, and it

Ramos Seechua Tria

Balances (108,000) (108,000) 132,000

F. Mactal, Macadang and Pangan are partners with capital balances of

50,000 x 3/5 = 30,000

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