Problem# 18

Installment Liquidation: Cash Priority Program

The capital and loan balances for partners Bernardino, Lee and Ong are shown below. They sh

Bernardino, Lee and Ong

Cash Priority Program

Bernardino Lee Ong

Capital Balances 150,000 350,000 200,000
Add: Loan Balances 100,000 100,000 150,000
Partners' Total Interest 250,000 450,000 350,000
Divide by: Profit and Loss Ratio 40% 40% 20%
Loss Absorption Balances 625,000 1,125,000 1,750,000
Priority 1- Ong - 625,000
Balance 625,000 1,125,000 1,125,000
Priority 1- Ong & Lee - 500,000 - 500,000
Balance 625,000 625,000 625,000

Problem#19
Installment Liquidation: Cash Priority Program

Santiago, Gorospe, Esparaguer

Cash Priority Progr
September 25, 20

Santiago Gorospe Esparaguera

Capital Balances 50,000 25,000 70,000
Add: Loan Balances 20,000 -10,000
Partners' Total Interest 70,000 25,000 60,000
Divide by: Profit and Loss Ratio 20% 25% 30%
Loss Absorption Balances 350,000 100,000 200,000
Priority 1- Santiago - 150,000
Balance 200,000 100,000 200,000
Priority 2- Santiago, Esparaguera & Ron- 100,000 - 100,000
Balance 100,000 100,000 100,000

Problem# 20
Installment Liquidation

Required:
1. Prepare the cash Priority Program
2. Prepare the journal entries to record the realization of assets and distribution of cash to creditors and partners.
 Espeleta and De Gula
Cash Priority Program
September 23, 2019

Cash Priority Payments to

Espeleta De Gula Espeleta
Capital Balances 60,000 20,000
Add: Loan Balances 10,000
Partners' Total Interest 60,000 30,000
Divide by: Profit and Loss Ratio 40% 60%
Loss Absorption Balances 150,000 50,000
Priority 1- Espeleta - 100,000 40,000
Balance 50,000 50,000 40,000

1. Sale of Non-Cash Assets

Cash 60000
Loss on Realization 10000
Non-Cash Assets

Distribution of Loss on Realization based on Partners' P/L Ratio

Espeleta, Capital 4000
De Gula, Capital 6000
Loss on Realization

2. Payment of Liabilities
Liabilities 64000
Cash

3. Sale of Non-Cash Assets

Cash 18000
Loss on Realization 12000
Non-Cash Assets

Distribution of Loss on Realization based on Partners' P/L Ratio

Espeleta, Capital 4800
De Gula, Capital 7200
Loss on Realization

4. Distibution of Cash to Partners

Espeleta, Capital 20000
Cash

Problem# 21
Installment Liquidation
On January 31, 2019, the partners Valdez, Navarro and Pamittan authorized the liquidation of their partnership. The statemen

Required:
1. Prepare the cash priority program
2. Prepare the journal entries

Valdez, Navarro and Pamittan

Cash Priority Program
January 31, 2019

Valdez Navarro Pamittan

Capital Balances 140,000 (70,000) 80,000
Add: Loan Balances 60,000 (50,000)
Partners' Total Interest 200,000 (120,000) 80,000
Divide by: Profit and Loss Ratio 40% 40% 20%
Loss Absorption Balances 500,000 - 300,000 400,000
Priority 1- Valdez - 100,000
Balance 400,000 - 300,000 400,000

1. Sale of Non-Cash Assets

Cash 140000
Loss on Realization 40000
Non-Cash Assets

Distribution of Loss on Realization based on Partners' P/L Ratio

Valdez, Capital 16000
Navarro, Capital 16000
Pamittan, Capital 8000
Loss on Realization

2. Sale of Non-Cash Assets

Cash 50000
Loss on Realization 10000
Non-Cash Assets

Distribution of Loss on Realization based on Partners' P/L Ratio

Valdez, Capital 4000
Navarro, Capital 4000
Pamittan, Capital 2000
Loss on Realization

3. Payment of Insolvent Partners

Cash 30000
Loan Receivable- Navarro

4. Distibution of Cash to Partners

Valdez, Capital 166666.666666667
Pamittan, Capital 63333.3333333333
Cash

Problem#22
Installment Liquidation

On November 10, 2019, De Guzman, Seechuan and Longalong partners had capital account balances of P20,000, P25,000, a
ratio.

Required:
1. Prepare the cash Priority Program assuming that liabilities totaled P20,000 on Nov. 10, 2019.
2. If De Guzman received P4,000, how much cash was paid to all partners?
3. If4.De Guzman
Seechua received
received P13,000,
only how
P11,000 as amuch did
result ofLongalong get? what was the loss on realization of partnership assets ( assu
the liquidation,
partnership)?

De Guzman, Seechua and Longalong

Cash Priority Program
November 10, 2019

De Guzman Seechua Longalong

Capital Balances 20,000 25,000 9,000
Add: Loan Balances
Partners' Total Interest 20,000 25,000 9,000
Divide by: Profit and Loss Ratio 57% 29% 14%
Loss Absorption Balances 35,088 86,207 64,286
Priority 1- Seechua - 21,921
Balance 35,088 64,286 64,286
Priority 2- Seechua & Longalong - 29,198 - 29,198
Balance 35,088 35,088 35,088

De Guzman Seechua Longalong

1st Priority 6357.09
2nd Priority 8467.42 4087.72
If De Guzman received 4,000 4000
29120.0289 14815.4533 7152.2878
Total 33120.0289 29639.9633 11240.0078

2 De Guzman 33120.0289
Seechua 29639.9633
 Longalong 11240.0078

De Guzman Seechua Longalong

1st Priority 6357.09
2nd Priority 8467.42 4087.72
If De Guzman received 13,000 13000
23990.0289 12205.4533 5892.2878
Total 36990.0289 27029.9633 9980.0078

3 Longalong 9980.0078

4 13156.7355172414
re shown below. They share profits or losses in the ratio of 4:4:2: respectively.

Ong
am

Cash Priority Payments to

Bernardino Lee Ong

125,000

200,000 100,000
0 200,000 225,000

go, Gorospe, Esparaguera and Ronzales

Cash Priority Program
September 25, 2019

Cash Priority Payments to

Ronzales Santiago Gorospe Esparaguera
50,000

50,000
25%
200,000
30,000
200,000
- 100,000 20,000 30,000
100,000 50,000 30,000

nd partners.
ash Priority Payments to
De Gula

70000

10000

64000

30000

12000

20000
rtnership. The statement of financial position as follows:

mittan
am
9

Cash Priority Payments to

Valdez Navarro Pamittan

40,000
40,000

180000

40000

60000

10000
 30000

230000

es of P20,000, P25,000, and P9,000 respecyively, and share profits or losses in 4:2:1

partnership assets ( assuming that no partner invested any additional assets in the

Longalong
am
19

Cash Priority Payments to

De Guzman Seechua Longalong

6,357

8,467 4,088
14,825 4,088
 Ong, Capital
Cash

Computation:
Bernardino
Priority 1: To Ong

Lee: 125,000 x 40/60

Ong: 125,000 x 20/60
0

Ronzales

25,000
25,000
 166,667
250,000

Lee Ong Total

125,000 125,000
125,000
83,333
41,667
83,333 166,667 250,000