PROBLEM 1: On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss ratio of

6:1:3 of partners A, B and C respectively, revealed the following data:

Cash 1,000,000 Other liabilities 2,000,000

Receivable from A 500,000 Payable to B 1,000,000
Other noncash assets 2,000,000 Payable to C 100,000
A, Capital 700,000
B, Capital (650,000)
C, Capital 350,000

On January 1, 2019, the partners decided to liquidate the partnership. All partners are legally declared to be personally
insolvent. The other noncash assets were sold for P1,500,000. Liquidation expenses amounting to P100,000 were
incurred.
1. How much cash was received by B at the end of the partnership liquidation?
a. 250,000
b. 150,000
c. 190,000
d. 270,000
2. How much cash was received by C at the end of partnership liquidation?
a. 270,000
b. 150,000
c. 350,000
d. 220,000

PROBLEM 2: D, E and F are partners in DEF Partnership with profit or loss ratio of 6:1:3. Due to disagreement, the
partners decided to liquidate their business with pre-liquidation statement of financial position presented below:

Cash 3,000,000 Liabilities 10,000,000

Noncash assets 17,000,000 D, Capital 1,000,000
E, Capital 4,000,000
F, Capital 5,000,000

The following additional notes are provided:

• All partners are legally declared to be personally insolvent.
• All noncash assets are sold during the liquidation process.
• Liquidation expenses amounting to P2M were paid.
• E receives a total of P2,500,000 at the end of liquidation.

1. What is the amount received by F at the end of liquidation?

a. 500,000
b. 2,500,000
c. 0
d. 3,500,000
2. Using the same data, what is the net proceeds from the sale of noncash assets?
a. 14,000,000
b. 10,000,000
c. 12,000,000
d. 8,000,000

PROBLEM 3: On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or loss ratio of
5:3:2 of respective partners A, B and C, showed the following information:

Cash 1,600,000 Total liabilities 2,000,000

Noncash assets 1,400,000 A, Capital 100,000
B, Capital 500,000
C, Capital 400,000

On January 1, 2019, the partners decided to liquidate the partnership in installment. All partners are legally declared to be
personally insolvent.

As of January 31, 2019, the following transactions occurred:

• Noncash assets with a carrying amount of P1,000,000 were sold at a gain of P100,000.
• Liquidation expenses for the month of January amounting to P50,000 were paid.
• It is estimated that liquidation expenses amounting to P150,000 will be incurred for the month of February, 2019.
• 20% of the liabilities to third persons were settled.
• Available cash was distributed to the partners.

As of February 28, 2019, the following transactions occurred:

• Remaining noncash assets were sold at a loss of P100,000.
• The final liquidation expenses for the month of February amounted to P100,000.
• The remaining liabilities to third persons were settled.
• Remaining cash was finally distributed to the partners.

1. What is the amount of cash received by partner C on January 31, 2019?

a. 260,000
b. 240,000
c. 300,000
d. 350,000
2. What is the share of B in the maximum possible loss on January 31, 2019?
a. 275,000
b. 110,000
c. 120,000
d. 165,000
3. What is the amount of total cash withheld on January 31, 2019?
a. 550,000
b. 1,600,000
c. 1,750,000
d. 1,700,000
4. What is the amount of cash received by partner A on February 28, 2019?
a. 0
b. 25,000
c. 195,000
d. 130,000

PROBLEM 4: On January 1, 2021, the partners decided to wind up the partnership affairs. During the winding up,
liquidation expenses amounted to P2,000,000 were paid. Non-cash assets with book value of P30,000,000 were sold
during January. 40% of total liabilities were also paid during January. P3,000,000 cash was withheld during January for
future liquidation expenses. On January 31, 2021, partner U received P10,000,000.

1. What is the amount received by partner F on January 31, 2021?

a. 2,500,000
b. 7,500,000
c. 5,000,000
d. 3,000,000

2. Using the same data, what is the net proceeds from the sale of non-cash assets during January 2021?
a. 25,000,000
b. 20,000,000
c. 22,000,000
d. 23,000,000

PROBLEM 5: On January1, 2020, ACJ Partnership entered into liquidation. The partners’ capital balances on this date
were as follows: A (25%) P2,500,000 ; C (35%) P5,400,000 ; J (40%) P3,700,000. The partnership has liabilities
amounting to P4,400,000, including a loan from C P600,000. Cash on hand before the start of the liquidation is P800,000.

With the information given answer the following independent situations:

1. Non cash assets amounting to P7,400,000 were sold at book value and the rest of the noncash assets were sold
at a loss of P4,200,000. How much cash will be distributed to the partners?
a. 8,000,000
b. 4,400,000
c. 7,400,000
d. 11,800,000
2. After exhausting the noncash assets of the partnership, assuming all partners has personal assets more than
their personal liabilities. How much cash must be invested by the partners to satisfy the claims of the outside
creditors and to pay the amount due to the partner/s?
a. 3,680,000
b. 4,480,000
c. 4,360,000
d. 3,800,000

3. If C received P2,255,000, how much was the loss from the realization of noncash assets?
a. 5,255,000
b. 10,700,000
c. 10,525,000
d. 9,945,000