Espeleta and De Guia Partnership

Cash Priority Program

September 23,2019
Cash Priority Payments to
Espeleta De Guia Espeleta De Guia
Capital balances 60,000 20,000 a
Add: Loan Balances 10,000 b
Partners' Total Interests 60,000 30,000
Divide by: Profit and Loss Ratio 40% 60% c
Loss Absorption Balances 150,000 50,000
Priority I: to Espeleta -100,000 40,000
50,000 50,000 40,000 0 d

Priority II: Amounts in excess of e

P 40,000 based on P/L Ratio 40% 60%
f

Computation:
(100,000x40%) 40,000
 Paraiso and Ligeralde Partnership
Statement of Liquidation
September 23- Oct 1,2019
Cash Non-Cash Assets Liabilities De Guia, loan
P/L Percentages
Balances before liquidation 5,000 100,000 15,000 10,000
Sept - Sales of Non-cash Assets 60,000 -70,000
Balances 65,000 30,000 15,000 10,000
Sept - Payment of liabilities to
Outsiders -15,000 -15,000
Balances 50,000 30,000 10,000
Sept- Initial payment to partners -49,000 -5,400
Balances 1,000 30,000 4,600
Oct - Sales of Non-cash Assets 18,000 -30,000
Balances 19,000 4,600
Oct - Final Installment -19,000 -4,600
 Dulay, Sandoval and Ramel Partneship
Journal Entries
Date Account Titles and Explanation PR
Espeleta De Guia Sep 23 Cash
40% 60% Espeleta, Capital (10,000x40%)
60,000 20,000 De Guia, Capital (10,000x60%)
-4,000 -6,000 Non-Cash Assets
56,000 14,000 To record loss realization of sales of noncash assets

Sep 23 Accounts Payable - Trade

56,000 14,000 Cash
-43,600 To record payment to outside creditors
12,400 14,000
-4,800 -7,200 Sep 23 Espeleta, Capital (40,000+(9,000x40%))
7,600 6,800 Loan Payable - De Guia
-7,600 -6,800 Non-Cash Assets
To record initial payment to partners

Oct 1 Cash
Espeleta, Capital (12,000x40%)
De Guia, Capital (12,000x60%)
Non-Cash Assets
To record loss realization of sales of noncash assets

Oct 1 Espeleta, Capital

Loan Payable - De Guia
De Guia, Capital
Cash
To record final payment to partners
artneship

Debit Credit
60,000
4,000
6,000
70,000
es of noncash assets

15,000
15,000

43,600
5,400
49,000

18,000
4,800
7,200
30,000
es of noncash assets

7,600
4,600
6,800
19,000