ABC Partnership

Statement of Financial Position

July 4, 2021

Assets
Cash 6,000.00
Other Assets 94,000.00
Total Assets 100,000.00

Liabilities and Partners' Capital

Liabilities 20,000.00
Loan Payable to B 4,000.00
A, Capital 27,000.00
B, Capital 39,000.00
C, Capital 10,000.00
Total Liabilities and Partners' Capital 100,000.00

The partners shared net income and losses as follows, A, 40%; B, 40%; and C, 20%. On July 4,
2021, the other assets realized P30,700 and P20,500 had to be paid to liquidate liabilities
because of an unrecorded trade accounts payable of P500. A and B were solvent, but C’s
personal liabilities exceeded personal assets by P5,000.

Required:
1. Prepare a statement of liquidation for A, B, and C Partnership on July 4, 2021. Compute
B’s loan and capital balances.
2. Prepare journal entries for A, B, and C partnership to record the liquidation on July 4,
2021.
3. How much cash would other assets have to realize on liquidation in order for C to
receive enough cash from the partnership to pay personal creditors in full? Assume that
P20,500 is required to liquidate the partnership liabilities.