Case A Case B Case A Case B

Problem 1 (10pts) Problem 1 (10pts) Problem 1 (10pts) Problem 1 (10pts)

Aguilar and Angeles formed a Aguilar and Angeles formed a Aguilar and Angeles formed a Aguilar and Angeles formed a
partnership wherein Aguilar is to partnership wherein Aguilar is to partnership wherein Aguilar is to partnership wherein Aguilar is to
contribute cash while Angeles is to contribute cash while Angeles is to contribute cash while Angeles is to contribute cash while Angeles is to
transfer the assets and liabilities of transfer the assets and liabilities of transfer the assets and liabilities of transfer the assets and liabilities of
his business. Account balances of his business. Account balances of his business. Account balances of his business. Account balances of
Angeles are as follows: Angeles are as follows: Angeles are as follows: Angeles are as follows:
Debit Credit Debit Credit Debit Credit Debit Credit
Cash 300,000 Cash 300,000 Cash 300,000 Cash 300,000
Accounts Accounts Accounts Accounts
Receivable 450,000 Receivable 450,000 Receivable 450,000 Receivable 450,000
Inventories 240,000 Inventories 240,000 Inventories 240,000 Inventories 240,000
Accounts Accounts Accounts Accounts
Payable 90,000 Payable 90,000 Payable 90,000 Payable 90,000
Angeles, Angeles, Angeles, Angeles,
Capital 900,000 Capital 900,000 Capital 900,000 Capital 900,000
The partners agreed on the The partners agreed on the The partners agreed on the The partners agreed on the
following conditions: following conditions: following conditions: following conditions:
a. An allowance for a. An allowance for a. An allowance for a. An allowance for
uncollectible accounts of uncollectible accounts of uncollectible accounts of uncollectible accounts of
P22,000 is to be established P22,000 is to be established P22,000 is to be established P22,000 is to be established
b. The inventories are to be b. The inventories are to be b. The inventories are to be b. The inventories are to be
valued at their current valued at their current valued at their current valued at their current
replacement cost of P270,000 replacement cost of P270,000 replacement cost of P270,000 replacement cost of P270,000
c. Prepaid expenses of c. Prepaid expenses of c. Prepaid expenses of c. Prepaid expenses of
P12,000 and accrued P12,000 and accrued P12,000 and accrued P12,000 and accrued
expenses of P5,000 are to be expenses of P5,000 are to be expenses of P5,000 are to be expenses of P5,000 are to be
recognized recognized recognized recognized
d. Angeles is to be credited for d. Angeles is to be credited for d. Angeles is to be credited for d. Angeles is to be credited for
an amount equal to the net an amount equal to the net an amount equal to the net an amount equal to the net
assets transferred assets transferred assets transferred assets transferred
e. Aguilar is to contribute e. Aguilar is to contribute e. Aguilar is to contribute e. Aguilar is to contribute
sufficient cash to have an sufficient cash to have an sufficient cash to have an sufficient cash to have an
equal interest in the equal interest in the equal interest in the equal interest in the
partnership. partnership. partnership. partnership.
f. The partners shall use the f. The partners shall use the f. The partners shall use the f. The partners shall use the
books of Angeles. books of Angeles. books of Angeles. books of Angeles.
Required: Prepare journal entries Required: Prepare journal entries Required: Prepare journal entries Required: Prepare journal entries
to adjust the books and to record to adjust the books and to record to adjust the books and to record to adjust the books and to record
the receipt of Aguilar’s investment. the receipt of Aguilar’s investment. the receipt of Aguilar’s investment. the receipt of Aguilar’s investment.

Problem 2 (46pts) Problem 2 (46pts) Problem 2 (46pts) Problem 2 (46pts)

Encina, Endrada and Elina Encina, Endrada and Elina Encina, Endrada and Elina Encina, Endrada and Elina
Partnership has the following Partnership has the following Partnership has the following Partnership has the following
account balances as of 31 account balances as of 31 account balances as of 31 account balances as of 31
December 2023, when they December 2023, when they December 2023, when they December 2023, when they
decided to liquidate and wind up decided to liquidate and wind up decided to liquidate and wind up decided to liquidate and wind up
the affairs of the partnership: the affairs of the partnership: the affairs of the partnership: the affairs of the partnership:
Liabilities and Liabilities and Liabilities and Liabilities and
Assets Capital Assets Capital Assets Capital Assets Capital
Cash – Liabilities – Cash – Liabilities – Cash – Liabilities – Cash – Liabilities –
P8,000 P44,800 P8,000 P44,800 P8,000 P44,800 P8,000 P44,800
Other Assets Endrada, Loan Other Assets Endrada, Loan Other Assets Endrada, Loan Other Assets Endrada, Loan
– P136,000 – P2,000 – P136,000 – P2,000 – P136,000 – P2,000 – P136,000 – P2,000
Elina, Loan – Elina, Loan – Elina, Loan – Elina, Loan –
P3,200 P3,200 P3,200 P3,200
Encina, Capital Encina, Capital Encina, Capital Encina, Capital
– P38,000 – P38,000 – P38,000 – P38,000
Endrada, Endrada, Endrada, Endrada,
Capital – Capital – Capital – Capital –
P24,000 P24,000 P24,000 P24,000
Elina Capital – Elina Capital – Elina Capital – Elina Capital –
P32,000 P32,000 P32,000 P32,000
Total – Total – Total – Total – Total – Total – Total – Total –
P144,000 P144,000 P144,000 P144,000 P144,000 P144,000 P144,000 P144,000
Required: Prepare a statement of Required: Prepare a statement of Required: Prepare a statement of Required: Prepare a statement of
liquidation assuming that other liquidation assuming that other liquidation assuming that other liquidation assuming that other
assets were sold for P68,000 and assets were sold for P68,000 and assets were sold for P68,000 and assets were sold for P68,000 and
that any deficient partner was that any deficient partner was that any deficient partner was that any deficient partner was
insolvent. solvent. insolvent. solvent.