| CPA REVIEW SCHOOL OF THE PHILIPPINES MANILA PRACTICAL ACCOUNTING PROBLEMS II BATCH 76 PARTNERSHIP LUMP-SUM & INSTALLMENT LIQUIDATION, (GUERRERO/GERMAN/LIM/SIY/FERRER/DELA CRUZ Problem, A, Band C are partners in a business being liquidated, The partnership has cash of P22,000, noncash assets with a book value of P264,000 and liabilities of P173,250. The following data relates to the partners as of June 1, 2014: (a) Ahas capital balance of P129,250, personal assets of P27,500, personal liabilities of P43,750. (0) B extended a loan to the partnership in the amount of P13,750, deficit of P38,500, personal assets of P41,250, personel liabilities of P16,500. (c) Chas a capital balance of P8,250, personal assets of P68,750 and personal liabilities of P41,250. (@) Their profit and loss ratio is 3:1:1, A, B and C, respectively. On June 12, 2014, assets with a book value of P82,500 were sold for P55,000 cash. The proceeds were Used to pay off liabilities of the partnership. During the remainder of June, no additional assets were realized and outside creditors began to pressure the partnership for payment, On July 3, the partners agreed to contribute personal assets, to whatever extent possible, in order to eliminate their respective deficits. Shortly thereafter, assets with book value of P55,000 and a fair value of P63,250 were distributed to A. ‘Assuming additional noncash assets with book value of P110,000 were soid in July for P148,500. How much cash would be distributed to C? A fe 12,100 3,850 S00 8,800 ! ? S50 22 gorP Problem 2. SCA Partnership has the following account balances before liquidation Cash ____F 350,000 Liabilities P__1,125,000_] | Noncash assets 7,375,000___|LoanfromA 50,000 [Hoan toc ___ 150,000 |S, Capital (40%) 41,250,000 Receivable from S ____ 20,000 _| C, Capital (40%) 1,900,000 -} Expenses 2,230,000 A, Capital (20%) 4,000,000 Revenues 4,800,000 During June, some noncash assets were sold that resulted to a loss of P46,125. Liquidation expenses of P175,000 were paid and additional expenses amounting to 90,000 were expected to be incurred through the following months of liquidation the partnership. Liabilities to outsiders amounting to __P875,000 were paid PA2-76622,375,000 2,130,000 2,328,875 2,083,875 poeP Problem 3. The partnership of MB, NC, and OP was dissolved on May 31, 2014, and the account balances after all noncash assets are converted to cash on July 1, 2014, along with residual P/L sharing ratios, are: Cash 262,500 Accounts payable 630,000 NC, Capita! (30%) 315,000 MB, Capital (30%) 472,500 OP, Capital (40%) 525,000 Personal assets and liabilities of the partners at July 1, 2014 are: Personal Assets Personal Liabilities MB. 420,000 472,500 NC 525,000 320,250 oP 997,500 420,000, If OP contributed P367,500 to the partnership to provide cash to pay the creditors, what amount of M's P472,500 partnership equity would appear to be recoverable: 414,750 425,250 £ 472,500 95,2 oP Oo eee Problem 4. The Partnership of DBM, TRA and MDS became inscivent on December 31, 2013 and is to be liquidated, DBM, TRA and MDS has the following balances respectively, 455,000, (P210,000), (P28,000). ‘After paying their personal liabilities, DBM has still 70,000 while TRA has P105,000 of their personal assets, However, MDS has still unpaid personal liabilities amounting to-P280,000 and his personal assets amounted only to P210,000. The partners share profits and losses equally. How much is the maximum amount that DBM can expect to receive from the partnership? ‘A. P217,000 B. P245,000 x c. P427,000 D. P322,000 Problem 5. J, A, and C are partners who share profits and losses as follows: J 35%, A 25%, and C 40%. ‘The Statement of Financial Position of the partnership 2s of December 21, 2013 is given below: seis | eee As of December 31, 2013 Assets = Ubilitiesand Equity x | Cash P8,000 | Liabilities 48,000 | Noncash Assets 110,000 | Loan from A 2,000 | | | 4, Capital 32,700 | | A Capital | 23,500 | | C,Capital | 41,800 | | Total Liabilities and Equity | P118,000 |On January 1, 2014, the partners decided to liquidate. For the month of January, some assets were sold for a loss of P2,000. Payment to partners J, A, and C from the initial sale of assets were P150, P2,250, ‘and P4,600 respectively. Cash withheld for possible liquidatior expenses and unrecognized liabilities ‘amounted to P1,258. ag What was the book/carrying value of the noncash assets sold in January? 28,258 19,000 P18,258 20,258 poe> Problem 6. V, F, and H are partners who share profits and losses as follows: V 35%, F 25%, and H 40%. ‘The Statement of Financial Position of the partnership as of December 31, 2013 is given below: VFH Company Statement of Financial Posit on ‘As of December 31, 2013 Assets Cash 420,000 | tial 1,050,000 Noncash Assets 41,650,000 | Loan from V 41,400 | | V, Capital 257,700 | F, Capital | 90,000 H, Capital 330,900 Total Assets P1,770,000 | Total Liabilities and Equity | 4,770,000 (On Jenuary 1, 2014, the partners decided to liquidate. All the rartners are solvent. If after the sale of noncash assets but before additional investment to cover the capital deficiency of any partner, F's capital balance was a'debit of P45,000. What is the total amount that V will receive? 90,300 P110,100 68,700 47,700 one> Problem 7. financial position prior to liquidation: Assets Cash P 24,000 Noncash assets 360,000 Total 384,000 Uibilities and Capital Liabilities 70,000 Loan payable to} 30,000 4, Capital (50%) 90,000: F, Capital (30%) 140,000 K, Capital (20%) 54,000 Total P.384,000 JFK partnership engaged in steet manufacturing business had the following condensed Assuming assets with a book value of P140,000 were sold for P100,000 and that all available cash was distributed, PA2-2602