Problem 1

On December 31, 2020, the Statement of Financial Position of ABC partnership with profit or loss ratio of 6:1:3 of partners A,
respectively, revealed the following data:

Cash 1,000,000 Other Liabilities 2,000,000

Receivable from 500,000 Payable to B 1,000,000
Other noncash a ? Payable to C 100,000
A, Capital 700,000
B, Capital -650,000
C, Capital 350,000

On January 1, 2021 the partners decided to liquidate the partnership. All partners are legally declared to be personally solven
noncash assets were sold for P1,500,000. Liquidation expenses amounting to P100,000 were incurred

Solution 1
C + R from A L+E NCA
NCA 1,500,000 3,500,000 2,000,000

Loss on Real Liq Total Loss

Total Loss 500,000 100,000 600,000

6 1 3 10
A B C
200,000 350,000 450,000
Loss (360,000.00) (60,000.00) (180,000.00) -600,000
-160,000 290,000 270,000
Contribution (solven 160,000
0 290,000 270,000

Problem 2
A, B, and C are partners who share profits and losses as follows: A 35%, B 25%, and C 40%. The Statement of Financial Position
as of December 31, 2022 is as follows

Cash 40,000 Liabilities 90,000

Non-cash Asset 550,000 Loan from B 10,000
A, Capital 163,500
B, Capital 117,500
C, Capital 209,000
590,000 590,000

On January 1, 2023 the partners decided to liquidate. For the month of January, assets with book value of P101,290 were sold
January, payment to partners A, B, and C were P750, P11,250, and P23,000 respectively. Cash withheld for possible liquidatio
Cash Distributed
A 750
B 11,250
C 23,000
35,000
Cash Beg -40,000
Liabilities 90,000
Future Exp 6,290
91,290 You can also compute this using SPP and working back from the loss on

Problem 3
ABC Partnership is entering into liquidation and the following information is provided

Cash 155,000 Liabilities 220,000

Non-cash Asset 1,350,000 Loan from C 30,000
A, Capital (20%) 255,000
B, Capital (20%) 325,000
C, Capital (60%) 675,000
1,505,000 1,505,000

During September, noncash assets with a book value of 375,000 were sold for 320,000. ABC Company paid 35,000 for the liqu
incurred and it also paid half of its liabilities to outside creditors. Creditors whose amount balances amount to 30,000 decided

Step 1: Compute the Cash Received by C (We can use SSP or CPP) but we will be using SSP here

Loss on Realization 55 Check for insolvency

Liquidation Expenses 35 A Interet
Gain on Condonment -30 Loss
Future Expenses 10
Unsold NCA 975 B, Interest
Total Loss 1,045 Loss

C, Interest 705
Loss -627
78 C received 78k

C, Interest 705
Loss on Realization -33
Liquidation Expense -21
Gain on Condonment 18
Payment Received -78
591

Problem 4
A, B, C partners, has a profit and loss ratio 20%, 35%, and 45%.The partnership had Cash of P500,000, Noncash assets of P1,00
P650,000 and Equity balances of partners of P100,000, P300,000, and P450,000, respectively. The partnership liquidated and
installment C received a cash of P50,000 all outside liabilities were also paid at this point. On the second Installment however
realized a loss on realization of assets of P100,000 and B received P37,500 and C received P62,500 as part of the 2nd installm
liquidation expense nor cash wittheld was inccured / made. How much is the unsold non cash assets afterthe first installment
Book Value of the non-cash assets after the second installment of realization sits at P300,000

SSP from Beg- 2nd Instllament

C, Cap 450
Money Received 113
C loss 338
Divide by % 45%
Total Loss 750

Check for Insolvency

A Cap 100
Loss 150
Insolvent -50

B, Cap 300
Loss 263
Not Insolvent 37.5

Total Loss 750

Loss on Insolve -50
Total Loss 700
Loss on Unsold -100
Loss on 2nd Real -300
Loss on 1st Real 300

SSP - 1st installment

C, Cap 450
Money Receive -50
Total loss 400
Divide by % 45%
Total Loss 889

Check for Insolvency

A Cap 100
Loss 178
Insolvent -78

B, Cap 300
Loss 311
Insolvent -11.1

Total Loss 889

Loss on Insolve -78
Loss on Insolve -11
Total Loss 800
Loss un 1st real -300
Loss on Unsold a 500

Problem 5
A, B, C partners, has a profit and loss ratio of 10%, 70%, 20% with a capital balance
of P300,000 , P200,000 and P500,000. At the end of the liquidation. A Received
cash of P50,000. Assuming B is insolvent, how much loss did C absorb due to the
insolvency of B

A, Cap 300
Money Received -50
Loss 250
P/L 10%
Total Loss 2,500

Disitribution of Loss
A B C
300 200 500
Loss -250 -1,750 -500 -2,500
50 -1,550 -
A and C P/L (10% + 20%) 30%
Insolvency of B -465
Insolvency of B 465
C P/L 66.70% 20% / 30% - Since A + C P/L is 30%
310
ofit or loss ratio of 6:1:3 of partners A, B, and C

egally declared to be personally solvent. The other

were incurred

0%. The Statement of Financial Position of the partnership

with book value of P101,290 were sold. At the end of

y. Cash withheld for possible liquidation expense and
PP and working back from the loss on realization :)))

ABC Company paid 35,000 for the liquidation expenes it

unt balances amount to 30,000 decided to condone ABC

eck for insolvency

255
-209
46
325
-209
116
 h of P500,000, Noncash assets of P1,000,000, liabilities of
ctively. The partnership liquidated and on the first
nt. On the second Installment however, the partnership
ed P62,500 as part of the 2nd installment of cash. No
on cash assets afterthe first installment of realization if the
00,000
Problem 1
Problem 2
Problem 7: The following information are related to Terminal Corporation which is undergoing liquidation:

1. Bonds payable amounting to P73,600 is secured by Inventory with book value of P123,000 and net realiable value of 2/3 of
2. Of the P195,600, accounts payable of P55,000 is secured by equipment with a carrying amount of P76.800 which is 70% rea
3. Buildings with a carrying amount of P129,000 has a net realizable value of P99,000
4. Other unrecorded liabilities are accrued interest payable on bonds, P3,100; salaries payable, P17,400; taxes payable, P11,6
5. Cash available
recorde amount ofprior to liquidation
P7,600 amounts
and P22,000, to P11,900
respectively, remaining assets other than those whose realizable values mentioned a
amount
7. Total liabilities of Terminal Corp. presented in the statement of financial position prior to liquidation amounts ot P380,000

Amount of Lia Amount Secured

 FS 76,700.00 82,000.00
PS 55,000.00 53,760.00

Salaries Payable
Taxes Payable
Trustees

Divide
Payout Ratio

Citymall Inc. has declared bankruptcy and has begun to liquidate. Unsecured claims will be paid at the rate of 40 cents on
holds a non-interest bearing note receivable from Citymall Inc. In the amount of P65,000, collaterized by machinery with
and liquidation value of P16,250. How much is the total amount paid to the creditor

Total Liab 65,000.0

Secured Part (16,250.0)
USL 48,750.0
Payout Ratio 0.4
Money received from USL 19,500.0
Moneyer received from PS 16,250.0
35,750.0
dergoing liquidation:

3,000 and net realiable value of 2/3 of the recorded amount

ng amount of P76.800 which is 70% realizable

ayable, P17,400; taxes payable, P11,600; and trustee's fee, P8,500

e whose realizable values mentioned above have a realizable value of 60% of the recorded
r to liquidation amounts ot P380,000

Free Assets USL

 176,720.00 288,900.00
5,300.00
1,240.00
182,020.00 290,140.00 108,120.00
(17,400.00) (17,400.00)
(11,600.00) (11,600.00)
(8,500.00) (8,500.00)
144,520.00 252,640.00 108,120.00
252,640.00
57.20%

ims will be paid at the rate of 40 cents on the peso. A creditor

P65,000, collaterized by machinery with a book value of P19,500
itor
255.94
255.74
0.2