RAMON MAGSAYSAY MEMORIAL COLLEGES-MARBEL, INC.

SCORE:
College of Business and Accountancy
ACCTG25 – Accounting for Special Transactions
Pretest – Partnership Liquidations
NAME:
1. Edgar Detoya and Edgar Esparaguera have decided to liquidate their partnership. Shown below is the Statement of Financial
Position prior to liquidation process:

Double E Trading
Statement of Financial Position
As of 31 March 2022
ASSETS LIABILITIES AND EQUITY
Cash 60,000.00 Accounts Payable 80,000.00
Accounts Receivable 40,000.00 Detoya, Loan 25,000.00
Inventories 80,000.00 Detoya, Capital 105,000.00
Other Non-Cash 150,000.00 Esparaguera, Capital 120,000.00
Total 330,000.00 Total 330,000.00

If 90% of the accounts receivable was collected and the remaining balance was written off against accounts of the
partners, what would be the new partner’s equity balance?

2. Using the same information in No. 1 and if payment to outside creditors should be given priority over partner’s loan,
how much is the cash balance of the company after paying its obligations?

3. The partners Melchor Bombeo, Felipe Niza Jr., and Doris Pateño who shared profit and losses in the ratio of 4:2:2
has decided to dissolve and liquidate their partnership. In the process of liquidation, their non-cash assets of
490,000.00 was realized at a loss of 340,000.00. However, they were able to pay their obligations to outside creditors
of 105,000.00. The partner’s equity balance before the start of the liquidation has totaled to 450,000.00 broken down
as follows: Bombeo – 180,000.00; Niza – 150,000.00; and Pateño – 120,000.00. At what amount were the non-cash
assets realized?

4. Using the same data in No. 3, how much was the cash balance at the beginning of the liquidation process?

5. Using the same data in No. 3 and assuming that Pateño develops a debit balance of 3,000.00 after the distribution of
the realization loss and that she is still solvent, how much cash she need to contribute to the partnership?

6. Using the same data in No. 3 and assuming that Pateño is insolvent, how much Bombeo and Niza shared on her
capital deficiency of 3,000.00?