CASE A: P700,000.

There is a gain on realization, P20,000 700,000-680,000=20,000

3T Partnersh
Statement of Liqu
December 31,

Cash Other Assers Liabilities

Profit & Loss Ratio

Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 700,000 (680,000)
Balances ₱ 740,000 ₱ 224,000
b. Payment of Liabilities (224,000) (224,000)
Balances ₱ 516,000
c. Payment to Partners (516,000)

Journal Entries
a. Sale of other assets & distribution of gain
Cash 700,000
Other Asset 680,000
Tik, Capital 8,000
Tak, Capital 8,000
Toe, Capital 4,000

b. Payment of Liabilities
Liabilities 224,000
Cash 224,000

c. Payment to partners
Tak, Loan 10,000
Toe, Loan 16,000
Tik, Capital 198,000
Tak, Capital 128,000
Toe, Capital 164,000
Cash 516,000

CASE B: P500,000. There is a loss on realization, but on capital deficiency. LOR P180,000 500,000-680,000=(180,000)

3T Partnersh
Statement of Liqu
December 31,

Cash Other Assers Liabilities

Profit & Loss Ratio

 Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 500,000 (680,000)
Balances ₱ 540,000 ₱ 224,000
b. Payment of Liabilities (224,000) (224,000)
Balances ₱ 316,000
c. Payment to Partners (316,000)

Journal Entries
a. Sale of other assets & distribution of gain
Cash 500,000
Tik, Capital 72,000
Tak, Capital 72,000
Toe, Capital 36,000
Other Asset 680,000

b. Payment of Liabilities
Liabilities 224,000
Cash 224,000

c. Payment to partners
Tak, Loan 10,000
Toe, Loan 16,000
Tik, Capital 118,000
Tak, Capital 48,000
Toe, Capital 124,000
Cash 316,000

CASE C: P370,000. There is a loss on realization, but on capital deficiency. Right of offset is exercised. LOR P180,000 370,0

3T Partnersh
Statement of Liqu
December 31,

Cash Other Assers Liabilities

Profit & Loss Ratio

Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 370,000 (680,000)
Balances ₱ 410,000 ₱ 224,000
b. Payment of Liabilities (224,000) (224,000)
Balances ₱ 186,000
c. Offset of Tak, Loan to Tak's capital deficiency
Balances ₱ 186,000
d. Payment to Partners (186,000)
 Journal Entries
a. Sale of other assets & distribution of gain
Cash 370,000
Tik, Capital 124,000
Tak, Capital 124,000
Toe, Capital 62,000
Other Asset 680,000

b. Payment of Liabilities
Liabilities 224,000
Cash 224,000

c. Offset loan to capital deficiency

Tak, Loan 4,000
Tak, Capital 4,000

d. Payment to partners
Tak, Loan 6,000
Toe, Loan 16,000
Tik, Capital 66,000
Toe, Capital 98,000
Cash 186,000

CASE D: P340,000. There is a loss on realization with capital deficiency. Deficient partner is solvent. LOR P340,000 340,00

3T Partnersh
Statement of Liqu
December 31,

Cash Other Assers Liabilities

Profit & Loss Ratio

Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 340,000 (680,000)
Balances ₱ 380,000 ₱ 224,000
b. Payment of Liabilities (224,000) (224,000)
Balances ₱ 156,000
c. Offset of Tak, Loan to Tak's capital deficiency
Balances ₱ 156,000
d. Additional investment of Tak 6,000
Balances ₱ 162,000
e. Payment to Partners (162,000)

Journal Entries
a. Sale of other assets & distribution of gain
Cash 340,000
 Tik, Capital 136,000
Tak, Capital 136,000
Toe, Capital 68,000
Other Asset 680,000

b. Payment of Liabilities
Liabilities 224,000
Cash 224,000

c. Offset loan to capital deficiency

Tak, Loan 10,000
Tak, Capital 10,000

d. Additional investment
Cash 6,000
Tak, Capital 6,000

e. Payment to partners
Toe, Loan 16,000
Tik, Capital 54,000
Toe, Capital 92,000
Cash 162,000
 3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
8,000 8,000 4,000
₱ 10,000 ₱ 16,000 ₱ 198,000 ₱ 128,000 ₱ 164,000

₱ 10,000 ₱ 16,000 ₱ 198,000 ₱ 128,000 ₱ 164,000

(10,000) (16,000) (198,000) (128,000) (164,000)

Gain on Realization
Tik 4/10 x 20,000 = 8,000
Tak 4/10 x 20,000 = 8,000
Toe 2/10 x 20,000 = 4,000

680,000=(180,000)

3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
 ₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
(72,000) (72,000) (36,000)
₱ 10,000 ₱ 16,000 ₱ 118,000 ₱ 48,000 ₱ 124,000

₱ 10,000 ₱ 16,000 ₱ 118,000 ₱ 48,000 ₱ 124,000

(10,000) (16,000) (118,000) (48,000) (124,000)

Gain on Realization
Tik 4/10 x 180,000 = 72,000
Tak 4/10 x 180,000 = 72,000
Toe 2/10 x 180,000 = 36,000

ed. LOR P180,000 370,000-680,000=(310,000)

3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
(124,000) (124,000) (62,000)
₱ 10,000 ₱ 16,000 ₱ 66,000 ₱ (4,000) ₱ 98,000

₱ 10,000 ₱ 16,000 ₱ 66,000 ₱ (4,000) ₱ 98,000

(4,000) 4,000
₱ 6,000 ₱ 16,000 ₱ 66,000 ₱ 98,000
(6,000) (16,000) (66,000) (98,000)
 Gain on Realization
Tik 4/10 x 370,000 = 124,000
Tak 4/10 x 370,000 = 124,000
Toe 2/10 x 370,000 = 62,000

. LOR P340,000 340,000-680,000=(340,000)

3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
(136,000) (136,000) (68,000)
₱ 10,000 ₱ 16,000 ₱ 54,000 ₱ (16,000) ₱ 92,000

₱ 10,000 ₱ 16,000 ₱ 54,000 ₱ (16,000) ₱ 92,000

(10,000) 10,000
₱ 16,000 ₱ 54,000 ₱ (6,000) ₱ 92,000
6,000
₱ 16,000 ₱ 54,000 ₱ 92,000
(16,000) (54,000) (92,000)

Gain on Realization
Tik 4/10 x 340,000 = 136,000
Tak 4/10 x 340,000 = 136,000
Toe 2/10 x 340,000 = 68,000
 CASE E: P250,000. There is a loss on realization with capital deficiency. Deficient partner is insolvent. LOR P430,000

3T Partnership
Statement of Liquid
December 31, 20

Cash Other Assers Liabilities

Profit & Loss Ratio

Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 250,000 (680,000)
Balances ₱ 290,000 ₱ 224,000
b. Payment of Liabilities (224,000) (224,000)
Balances ₱ 66,000
c. Offset of Tak, Loan to Tak's capital deficiency
Balances ₱ 66,000
d. Additional loss to other partners in the ratio of
4:2 due to Tak's insolvency
Balances ₱ 66,000
e. Additional loss to Toe due to Tik's insolvency
Balances ₱ 66,000
f. Payment to Partners (66,000)

Journal Entries
a. Sale of other assets & distribution of gain
Cash 250,000
Tik, Capital 172,000
Tak, Capital 172,000
Toe, Capital 86,000
Other Asset 680,000

b. Payment of Liabilities
Liabilities 224,000
Cash 224,000

c. Offset loan to capital deficiency

Tak, Loan 10,000
Tak, Capital 10,000

d & e Additional loss to other partners, Tak's insolv.

Tik, Capital 18,000
Toe, Capital 24,000
Tak, Capital 42,000

f. Payment to partners
 Toe, Loan 16,000
Toe, Capital 50,000
Cash 66,000

3T Partnership
Schedule to Accompany Statement of Liquidation
December 31, 2019

Tik (4) Tak (4) Toe (2)

Capital balances (after the offset) ₱ 18,000 ₱ (42,000) ₱ 74,000
Add: Loan balances 16,000
Total partner's interest ₱ 18,000 ₱ (42,000) ₱ 90,000
Restricted interest-possible loss of 42,000 to (28,000) 42,000 (14,000)
Tik & Toe in the ratio of 4:2
Balances ₱ (10,000) ₱ 76,000
Additional loss to Toe 10,000 (10,000)
Free interest - amount to be paid to partner ₱ 66,000

Payment to apply on:

Loan 16,000
Capital 50,000
Cash Settlement 66,000

CASE F: P180,000. Additional cash investment of deficient partner is considered as second cash distribution to partn
to determine the amounts to be paid to partners. LOR P500,000 180,000-680,000=(500,000)

3T Partnership
Statement of Liquid
December 31, 20

Cash Other Assers Liabilities

Profit & Loss Ratio

Balances ₱ 40,000 ₱ 680,000 ₱ 224,000
a. Realization & distribution of gain 180,000 (680,000)
Balances ₱ 220,000 ₱ 224,000
b. Payment of Liabilities (220,000) (220,000)
Balances ₱ 4,000
c. Offset of Tak, Loan to Tak's capital deficiency
Balances ₱ 4,000
d. Additional investment of Tik & Tak 80,000
Balances ₱ 80,000 ₱ 4,000
e. Payment to Liabilities (4,000) (4,000)
Balances ₱ 76,000
f. Payment to Partners (76,000)
 Journal Entries
a. Sale of other assets & distribution of gain
Cash 180,000
Tik, Capital 200,000
Tak, Capital 200,000
Toe, Capital 100,000
Other Asset 680,000

b. Payment of Liabilities
Liabilities 224,000
Cash 220,000
e. Cash (additional investment) 4,000

c. Offset loan to capital deficiency

Tak, Loan 10,000
Tak, Capital 10,000

d. Additional investment
Cash 80,000
Tik, Capital 10,000
Tak, Capital 70,000

f. Payment to partners
Toe, Loan 16,000
Toe, Capital 60,000
Cash 76,000

3T Partnership
Schedule to Accompany Statement of Liquidation
December 31, 2019

Tik (4) Tak (4) Toe (2)

Capital balances (after the offset) ₱ (10,000) ₱ (70,000) ₱ 60,000
Add: Loan balances 10,000 16,000
Total partner's interest ₱ (10,000) ₱ (60,000) ₱ 76,000
Restricted interest-possible loss of 70,000 to 10,000 60,000 (70,000)
Toe if Tik & Tak fails to pay their deficiency
Free interest - amount to be paid to partner ₱ 6,000

Payment to apply on:

Loan ₱ 16,000
Capital (10,000)
Cash Settlement ₱ 6,000
partner is insolvent. LOR P430,000 250,000-680,000=(430,000)

3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
(172,000) (172,000) (86,000)
₱ 10,000 ₱ 16,000 ₱ 18,000 ₱ (52,000) ₱ 74,000

₱ 10,000 ₱ 16,000 ₱ 18,000 ₱ (52,000) ₱ 74,000

(10,000) 10,000
₱ 16,000 ₱ 18,000 ₱ (42,000) ₱ 74,000
(28,000) 42,000 (14,000)

₱ 16,000 ₱ (10,000) ₱ 60,000

10,000 (10,000)
₱ 16,000 ₱ 50,000
(16,000) (50,000)

Gain on Realization
Tik 4/10 x 340,000 = 136,000
Tak 4/10 x 340,000 = 136,000
Toe 2/10 x 340,000 = 68,000

Loss to Other Partner

Tik 4/6 x 42,000 = 28,000
Toe 2/6 x 42,000 = 14,000
 74,000 - 10,000 - 14,000

s second cash distribution to partners requiring a schedule to accompany the statement of liquidation
0=(500,000)

3T Partnership
Statement of Liquidation
December 31, 2019

Loan Capital
Tak Toe Tik Tak Toe
40% 40% 20%
₱ 10,000 ₱ 16,000 ₱ 190,000 ₱ 120,000 ₱ 160,000
(200,000) (200,000) (100,000)
₱ 10,000 ₱ 16,000 ₱ (10,000) ₱ (80,000) ₱ 60,000

₱ 10,000 ₱ 16,000 ₱ (10,000) ₱ (80,000) ₱ 60,000

(10,000) 10,000
₱ 16,000 ₱ (10,000) ₱ (70,000) ₱ 60,000
10,000 70,000
₱ 16,000 ₱ 60,000

₱ 16,000 ₱ 60,000
(16,000) (60,000)
Gain on Realization
Tik 4/10 x 500,000 = 200,000
Tak 4/10 x 500,000 = 200,000
Toe 2/10 x 500,000 = 100,000

60,000 - 70,000
 Total capital (credit) ₱ 92,000
Less: Cash balance for distribution to partners (debit) 24,000
Loss on realization ₱ 68,000

Settlement of cash to partners would be distributed as follows: Schedule of Cash Dist

Doy
40%
Capital balances ₱ 22,000
Add loan 4,000
Total Partners interest ₱ 26,000
Loss on Realization (27,200)
Balances ₱ (1,200)
Additional loss to Rey, May, Fay for the deficiency of 1,200
Doy in the ratio of 30:20:10
Balances
Additional loss to May, Fay for the deficiency of Rey
in the ratio of 20:10
Free interest - amount to be paid to partner

Doy 50/100 x 68,000 = 27,200

Rey 30/100 x 68,000 = 20,400
May 20/100 x 68,000 = 13,600
Fay 10/100 x 68,000 = 6,800

Rey 30/60 x 1,200 = 600

May 20/60 x 1,200 = 400
Fay 10/60 x 1,200 = 200

May 20/30 x 400 = 267

Fay 10/30 x 400 = 133
 22,000 + 20,600 + 27,400 + 18,000 + 4,000

buted as follows: Schedule of Cash Distribution

Rey May Fay

30% 20% 10%
₱ 20,600 ₱ 27,400 ₱ 18,000

₱ 20,600 ₱ 27,400 ₱ 18,000

(20,400) (13,600) (6,800)
₱ 200 ₱ 13,800 ₱ 11,200
(600) (400) (200)

₱ (400) ₱ 13,400 ₱ 11,000

400 (267) (133)

₱ 13,133 ₱ 10,867
24,000
 Guess Jag
Capital ₱ 164,000 ₱ 134,000
Less: Drawing (debit balance) (32,000)
Add: Loan 40,000
Total Net Equity ₱ 132,000 ₱ 174,000

Total assets ₱ 638,000

Less: Net equity (438,000)
Total liabilities ₱ 200,000

1. The total loss from the liquidation of the partnership

Jag, Capital 134,000

Add: Jag, Loan 40,000
Total Interest 174,000
Less: Cash received -111,000
Share in Loss in Realization 63,000
Divide: Ratio 30%
Total Loss 210,000

2. Prepare the statement of liquidation. Other asset, P568,000. LOR, P210,000 210,000-568,000=(358,000)

Guess, Jag, and Lev

Statement of Liquida
January 31, 2019

Cash Other Asset

Profit & Loss Ratio

Balances ₱ 70,000 ₱ 568,000
a. Closing of drawing account
Balances ₱ 70,000 ₱ 568,000
b. Realization & distribution of gain 210,000 (568,000)
Balances ₱ 280,000
c. Payment of Liabilities (200,000)
Balances ₱ 80,000
d. Additional loss to other partners in the ratio of
3:2 due to Guess's insolvency
Balances ₱ 80,000
e. Offset of Jag, Loan to Jag's capital deficiency
Balances ₱ 80,000
f. Payment to Partners (80,000)
 3. Journal Entries
a. Eliminating Drawing Account
Guess, Capital 32,000
Levis, Capital 12,000
Guess, Drawing 32,000
Levis, Drawing 12,000

b. Sale of other assets & distribution of gain

Cash 210,000
Guess, Capital 179,000
Jag, Capital 107,400
Levis, Capital 71,600
Other Asset 568,000

c. Payment of Liabilities
Liabilities 200,000
Cash 200,000

d. Additional loss to other partners

Jag, Capital 28,200
Levis, Capital 18,800
Guess, Capital 47,000

e. Offset to loan
Jag, Loan 1,600
Jag, Capital 1,600

f. Payment to partners
Jag, Loan 38,400
Levis, Capital 41,600
Cash 80,000

Cash Other Asset

Profit & Loss Ratio

Balances ₱ 70,000 ₱ 568,000
a. Closing of drawing account
Balances ₱ 70,000 ₱ 568,000
b. Realization & distribution of gain 210,000 (568,000)
 Balances ₱ 280,000
c. Payment of Liabilities (200,000)
Balances ₱ 80,000
d. Additional loss to other partners in the ratio of
3:2 due to Guess's insolvency
Balances ₱ 80,000
e. Offset of Jag, Loan to Jag's capital deficiency
Balances ₱ 80,000
f. Payment to Partners (80,000)
 Levis
₱ 144,000
(12,000)

₱ 132,000 ₱ 438,000

,000 210,000-568,000=(358,000)

Guess, Jag, and Levis

Statement of Liquidation
January 31, 2019

Liabilities Loan Drawing Capital

Jag Guess Levis Guess Jag
50% 30%
₱ 200,000 ₱ 40,000 ₱ 32,000 ₱ 12,000 ₱ 164,000 ₱ 134,000
(32,000) (12,000) (32,000)
₱ 200,000 ₱ 40,000 ₱ 132,000 ₱ 134,000
(179,000) (107,400)
₱ 200,000 ₱ 40,000 ₱ (47,000) ₱ 26,600
(200,000)
₱ 40,000 ₱ (47,000) ₱ 26,600
47,000 (28,200)

₱ 40,000 ₱ (1,600)
(1,600) 1,600
₱ 38,400
(38,400)
 Liabilities Loan Drawing Capital
Jag Guess Levis Guess Jag
50% 30%
₱ 200,000 ₱ 40,000 ₱ 32,000 ₱ 12,000 ₱ 164,000 ₱ 134,000
(32,000) (12,000) (32,000)
₱ 200,000 ₱ 40,000 ₱ 132,000 ₱ 134,000
(179,000) (107,400)
₱ 200,000 ₱ 40,000 ₱ (47,000) ₱ 26,600
(200,000)
₱ 40,000 ₱ (47,000) ₱ 26,600
47,000 (28,200)

₱ 40,000 ₱ (1,600)
(1,600) 1,600
₱ 38,400
(38,400)
Capital
Levis
20%
₱ 144,000
(12,000)
₱ 132,000
(71,600)
₱ 60,400

₱ 60,400
(18,800)

₱ 41,600

₱ 41,600
(41,600)
Capital
Levis
20%
₱ 144,000
(12,000)
₱ 132,000
(71,600)
₱ 60,400

₱ 60,400
(18,800)

₱ 41,600

₱ 41,600
(41,600)
D. What is the amount of cash available for distribution?
Cash Liabilities Capital
Red
Profit & Loss Ratio 20%
Balance ₱ 60,000
Additional loss to other partner -12,000
48,000

Answer: None, because there's no liabilities that are needed for computation of cash

E. If non-cash assets were sold for an amount equal to book value, what amount of cash should Orange and Lemo
respectively received?

Net Asset 260,000

Orange, Capital 170,000
Lemon, Capital 90,000

Net Asset = Book Value 260,000 260,000

-170,000 -90,000
90,000 170,000

260,000 / 2 = 130,000
 Capital
White Blue
30% 50%
₱ 90,000 ₱ (30,000)
-18,000 30,000
72,000 120,000

t of cash should Orange and Lemon

 1. Schedule showing the net amount of liquidation gain or loss
1 Allowance for Bad Debts 12,000
2 Merchandise Inventory 25,000
3 Prepaid Advertising 800
4 Office Equipment 24,000
5 Accounts Payable 2,000
6 Notes Payable 1,000
Davis, Loan 4,000

ASSETS Book Value Realized

Accounts Receivable 60,000 64,000
Merchandise Inventory 50,000 25,000
Prepaid Advertising 2,000 800
Office Equipment 40,000 24,000
Total 152,000 113,800

Anthony & Davis Partnership

Statement of liquidation
31-Jan-19

Cash Other Assets

Profit & Loss Ratio

Balances before Liquidation 1,000 152,000
a. Realization & distribution of gain 113,800 -152,000
Balances 114,800
Unrecorded Liabilities
Balances
b. Payment of Liabilities -109,000
Balances 5,800
c. Additional investment of Davis 4,000
Balances 9,800
d. Additional Loss to Anthony
Balances 9,800
e. Payment to partners -9,800

a. Anthony, Capital 1,200

Davis, Capital 1,800
Accounts Payable 2,000
Notes Payable 1,000

b. Cash 113,800
 Anthony, Capital 15,280
Davis, Capital 22,920
Allowance for Bad Debts 20,000
Accumulated Depreciation 60,000
Accounts Receivable 80,000
Merchandise Inventory 50,000
Prepaid Adevertisement 2,000
Office Equipment 100,000

c. Accounts Payable 22,000

Notes Payable 87,000
Cash 10,900

d. Cash 4,000
Davis, Capital 4,000

e. Anthony, Capital 3,720

Davis, Capital 3,720

f. Anthony, Capital 9,800

Cash 9,800
 Gain / (Loss)
4,000
-25,000
-1,200
-16,000
-38,200

Partnership
quidation
19

Liabilities Capital
Accounts Payable Notes payable Anthony Davis
40% 60%
20,000 86,000 28,800 15,200
-15,280 -22,920
20,000 86,000 13,520 -7,720
2,000 1,000

13,520 -7,720
4,000
13,520 -3,720
-3,720 3,720
9,800
-9,800
 Cash Liabilities

Profit and Loss Ratio

Balance ₱ 22,200 ₱ 3,000

Cash Balance before Realization

Liability 3,000
Divide: Cash 22,200
Non-cash assets -23,200
Cash balance for distribution to partners (debit) 2,000

Conversion of the Non-Cash asset into Cash

Tota Capital 60,000
Less: Cash Balance for Distribution 22,200
Loss on Realization 37,800

Bench = 37,800 x 3/21 + P5,400

GOR P2,000
Cash Non-cash asset
Profit and Loss Ratio
Balance before Liquidation 2,000 61,000
Realization 23,200 -61,000
Balance 25,200
Payment of liabilities -3,000
Balances 22,200
Additional Loss to other partners
Balances 22,200
Payment to partners -22,200

H Final cash settlement to Marie 60,000

Less: Marie, Capital before liquidation 75,000
Share in profit (66,000 x 4/10) 26,400
Marie's share on loss -41,400
Divide: P&L ratio 40%
Total loss on realization -103,500
Less: Book Value of Non-cash asset 336,000
Sale of assets 232,500
 Capital
Bench Mark Spencer Lee
3 4 6 8
₱ 1,000 ₱ 25,000 ₱ 25,000 ₱ 9,000

Capital
Liabilities Bench Mark Spencer Lee
3 4 6 8
3,000 ₱ 1,000 ₱ 25,000 ₱ 25,000 ₱ 9,000
-5,400 -7,200 -10,800 -14,400
3,000 -4,400 17,800 14,200 -5,400
-3,000
-4,400 17,800 14,200 -5,400
4,400 -3,920 -5,880 5,400
13,880 8,320
-13,880 -8,320