1. Cacho, Aspiras, Yumul and Lim are partners sharing profits and losses equally.

The
partnership is insolvent and is to be liquidated. The status of the partnership and each partner is
presented below.

Cacho Aspiras Yumul Lim

Partnership capital balance P 150,000 P 100,000 P(200,000) P(300,000)

Personal assets(exclusive of
partnership interest) 1,000,000 300,000 800,000 10,000

Personal liabilities (exclusive of

partnership interest) 400,000 600,000 50,000 280,000

The partnership creditors:

a. Must first seek recovery against Yumul because he is personally solvent and he has a
negative capital balance.
b. Will not be paid in full regardless of how they agreed legally because the partnership asset
is less than the partnership liabilities.
c. Will have to share Aspiras’ interest in the partnership on a pro rata basis with Aspiras’
personal creditors.
d. Have first claim to partnership assets befor any partner’s personal creditors have rights to
the partnership assets.

2. Using the information in number 1, the partnership creditors may obtain recovery of their
claims
a. In the amount of 62,500from each partner
b. From the personal assets of either Cacho or Aspiras
c. From the personal assets of either Yumul or Lim
d. From the personal assets of either Cacho or Yumul for some all of their claims

3. After all non cash assets have been converted into cash in the liquidation of the Gamboa
and Horacio Partnership, the ledger contains the following balances:
Debit credit
Cash P 141,000
Accounts Payable P 96,000
Loan Payable to Gamboa 45,000
Gamboa, Capital 21,000
Horacio, Capital 21,000

Available cash should be distributed with P96,000 going to accounts payable and:
a. P 45,000 to the Loan Payable to Gamboa
b. P 22,500 each to Gamboa and Horacio
c. P 24,000 to Gamboa and p 21,000 to Horacio
d. P 21,000 to Gamboa and p 24,000 to Horacio

4. On December 31, the partnership accounts of Carbo, Hipolito and Imperial who share profits
and losses in the ratio of 5:3:2 follows:
Carbo, Drawing – debit P 12,000
Imperial Drawing – credit 4,800
Accounts receivable – Carbo 7,200
Loans Payable - Hipolito 14,400
 Carbo, Capital 59,400
Hipolito Capital 54,400
Imperial, Capital 39,000

Total partnership assets on this day stands at P211,200, including cash of P64,200. The
partnership is liquidated and Imperial ultimately receives P33,000 in final liquidation. How
much is the total loss on resalizationof the partnership?

a. P10,800 c. P54,000
b. P31,200 d. P64,000

5. As of December 31,2011, the books of GTB Partnership showed capital balances of Gueco-
P40,000; Tiangco-P25,000; Barcelo-P5000. The partners’ profit and loss ratio was3:2:1
respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for
P37,000 cash. After settlement of liabilities amounting toP12,000, they still have P28,000 cash left
for distribution. The loss on realization of the non-cash assets was:

a. P28,000 c. P42,000
b. P40,000 d.P45,000

6. Using the information in number 5, and assuming that any debit balance of partners’ capital
in uncollectible, the share of Gueco on the P28,000 cash for distribution was:
a. P17,800 c. P19,000
b. P18,000 d. P28,000

7. Alarcon, Baretto and Coronel, partners, are in textile distribution business sharing profits
and losses equally. On, December 31, 2011, the partnership capital and partners drawing are as
follows:
Alarcon Baretto Coronel Total
Capital P 100,000 P 80,000 P 300,000 P 480,000

Drawing 60000 40000 20000 120000

The partnership was unable to collect on trade receivables and was forced to liquidate. Operating
profit amounted to P72,000 which was all exhausted including the partnership assets. Unsettled
creditors claim on December31, 2011 total P84,000. Baretto and Coronel have substantial private
resources but Alarcon has no personal asset s. The loss on realization was:
a. P360,000
b. P432,000
c. P480,000
d. P516,000
8. using the information in number 7, the final cash distribution to Coronel was:
a. P78,000
b. P84,000
c. P108,000
d. P516,000
9. Doria and Elma are partners with capital balance and profit and loss ratio as follows:
Capital Profit and Loss Ratio
Doria P 24,500 60.00%
Elma 15500 40.00%
P40,000 100.00%
The partners decidedto liquidate the partnership. The firms liabilities amounts P36,000, including
P4,000 owing to Doria and P3,500 owing on Elma on loans. After realization of assets, the cash on
hands amounts to P37,500. The loss on realization amounts to:
a. P2,500
b. P4,000
c. P37,500
d. P38,500
10. Using the information in number 9, the settlement to partners Doria and Elma would be
cash of:
a. P22,500 and P15,000 respectively
b. P1,500 and P1,000 respectively
c. P5,400 and P3,600 respectively
d. P4,000 and P3,500 respectively
11. Jurado, Katindig, Lazaro and Marcelo are partners sharing earnings in the ratio of 3:4:6:8.
the balance of their capital accounts on December 31, 2011 are as follows:
Jurado P1,000
Katindig 25000
Lazaro 25000
Marcelo 9000
P60,000
The partners decided to liquidate and they accordingly convert the non-cash assets into P23,200
of cash. After paying the liabilities amounting toP3,000 they have P22,200 to divide. Assume that a
debit balance in any of partner's capital account is uncollectible. The book value of the non-cash
assets amounted to:
a, P61,000
b. P63,000
c. P25,200
d. P45,400
12. Using the information in number 11, the share of Jurado in the loss upon conversion of the
non-cash assets into cash was:
a. P1,000
b. P4,792
c. P5,257
d. P5,400
13. Using the information in number 11, when the P22,200 was divided, Lazaro got:
a. P6,342
b. P8,320
c. P10,800
d. P14,200
14. Rubio, Simon and Tangco decided to dissolve the partnership on November 30, 2012. The
capital balances and profit and loss ratio on this date follow:
Capital Profit and Loss Ratio
Rubio 50000 40.00%
Simon 60000 30.00%
Tangco 20000 30.00%
The net profit from January to November 30, 2012 is P44,000. Also, on this date, cash and
liabilities are P40,000 and P90,000, respectively.
For Rubio to receive P55,200 in full settlement of his interes in the firm, how much must be
realized from the sale of the non-cash assets?
 a. P177,000
b. P187,000
c. P193,000
d. P196,000
15. Esper, Ester, Ethel and Elmer share profits in the ratio of 2:1:1:1. The partnership cannot
meet its obligations to creditors and dissolution is authorized on September 30, 2012. A statement
of financial position for the partnership on this date shows balances as follows:

ASSETS LIABILITIES AND CAPITAL

Cash P Liabilities
90,000 P265,000
Other Assets Elmer, Loan
400,000 25,000
Esper, Capital
50,000
Ester, Capital
50,000
Ethel, Capital
50,000
Elmer, Capital
50,000
Total Assets Total Liabilities and Capital
P490,000 P490,000
The personal status of partners on this date is determined to be as follows:
Partners Cash and cash value of personal assets Personal liabilities

Esper P250,000 P150,000

Ester 100000 150000
Ethel 150000 125000
Elmer 200000 250000
The other assets of the partnership are sold and realized P120,000. Additional contributions by
appropriate parties in meeting the claims of firms creditors were made. The amount that will be
paid to the personal creditors of Esper would be:
a. P150,000
b. P165,000
c. P222,500
d. P250,000
16. Using the information in number 15, the amount that will be paid to the personal creditors of
Esper be:
a. P100,000
b. P142,000
c. P150,000
d. P180,000
• 17. Using the information in number 15, the amount that will be paid to the personal
creditors of Elmer would be:
a. P200,000
b. P217,500
c. P235,000
d.P250,000
18. cap..... on alleged inside information, Urbe and Viray formed a partnership to purchase, sell or
otherwise trade in Bre-X mining shares. Bre-X recently made a significant finding of gold deposits
in its property in Busang, Indonesia. They started cautiosly by making an initial but modest cash
contribution of P137,500 each. They agree to divide earnings equally and further agreed to settle
and close the partnership after six months of furios but ferocious (insider) trading. Below is the
synopsis of the transactions for six months.
By Urbe By Viray
Purchase of shares P 1,237,500,000 P 495,000,000
Sales of shares 1339250000 462000000
Interest charges paid 2200000 1375000
Dividend income receivables 1100000 2750000
How much will Viray receive (or pay) in final settlement of the partnership?
a. P 2,887,500
b. P 66,137,500
c. (P 31,625,000)
d. (P 34,512,500)
19. The statement of financial position for the partnership of Delia, Irma and Flora, whose share of
profits and losses are 40%, 50% and 10%, is as follows:
Cash P 150,000 Accounts Payable P 450,000
Inventory 1,080,000 Delia, Capital 450,000
Irma, Capital 480,000
Flora, Capital 135,000
Total Assets P 1,230,000 Total Liabilties and Capital P
1,230,000
If the inventory is sold for P900,000, how much should Delia receive upon liquidation of the
partnership?
a. P104,000
b. P300,000
c. P408,000
d. P480,000
20. Using the information in number 19 and assuming the inventory is sold for P540,000, how
much should flora receive upon liquidation of the partnership?
a. P84,000
b. P97,500
c. P111,000
d. P165,000
21. Using the information in number 19 and assuming that the partnership will be liquidated in
installment. Assume further that as cash becomes available, it will be distributed to the partners;
and inventory costing P600,000 is sold for P420,000, how much cash should be distributed to each
partner at this time?
Delia Irma Flora
a. P 48,000 P 60,000 P 12,000
b. P 60,000 - P 60,000
c. P 96,000 - P 24,000
d. P 168,000 P 210,000 P 42,0000
22. In accounting for the lump-sum liquidation of a partnership, cash payments to partners after
all non-partner creditors' claims have been satisfied, but before the final cash distribution, should
be according to:
a. the partners' relative profit and loss sharing ratio
b. the final balances in partner capital account
c. the partners' relative share of the gain or loss on liquidation
d. safe payments liquidation
23. In a partnership liquidation, the final cash distribution to the partners should be made in
accordance with the:
a. partner profit and loss sharing ratio
b. balances of partners capital accounts
c. ratio of the capital contributions by partners
d. safe payment computations
24. The following statement of Financial Position was prepared for the Estrada, Fortun and Gener
Partnership on March 31, 2012:
Cash P 25,000 Liabilities P 52,000
Other Assers 180,000 Estrada, Capital(40%) 40,000
Fortun, Capital(40%) 65,000
Gener, Capital(20%) 48,000
Total Assets P 205,000 Total Liabilities and Capital P
205,000
The partnership is being liquidated by the sale of assets in installments. The first sale of non-cash
assets having a book value of P90,000 realizes P50,000. The amount of cash each partner should
receive in the first installment is:
Estrada Fortun Gener
a. P 0 P 5,000 P 18,000
b. P 12,000 P 13,000 P 22,000
c. P 27,000 P 5,000 P 18,000
d. P 40,000 P 65,000 P 60,000
25. Using the information in number 24 and assuming P3,000 cash is withheld for possible
liquidation expenses, how much cash should Gener received?
a. P3,000
b. P17,000
c. P18,000
d. P21,000
26. Using the information on number 24 and assuming as a separate case, that each partner
properly received the same amount of cash in the distribution after the second sale of the assets.
Assume further that the cash to be distributed amounts to P14,000 from the third sale of assets,
and unsold assets with a P6,000 book value remain, how should the P14,000 be distributed to
Estrada, Fortun and Gener respactively?
a. P -0-; P11,200; P2,800
b. P5,000; P5,000; P4,000
c. P5,600; P5,600; P2,800
d. P5,600; P6,500; P2,800
27. Aguila, Baldres and Corpuz are partners. On January 3, 2012, their capital balances and profit
and loss ratio are as follows:
Capital Profit and Loss Ratio
Aguila P25,000 60.00%
Baldres 50000 25.00%
Corpuz 60000 15.00%
Corpuz withdrew P10,000 during the year. Net loss for the year ended December 31, 2012 tataled
P20,000. Hence, the partners decided to liquidate the partnership. It is uncertain how much will be
the ultimate yield on the assets but favorable realization is expected. It is therefore, agreed to
distribute cash as it becomes available. There are unpaid liabilities of P5,000 and cash on hand of
P700.
The amount of non-cash asset before liquidation is:
a. P104,300
b. P105,000
c. P109.300
d. P110,000
28. Using the information in number 27, the amount to be realized by the partnership on the sale
of the assets so that Aguila will receive a total of P19,000 in the final settlement of his interest is:
a. P6,000
b. P9,300
c. P103,300
d. P119,300
29. Using the information in number 27 and assuming Corpuz received a total of P33,000, the
amount that Baldres would have received at this point is:
a. None
b. P2,000
c. P5,000
d. P21,667
30. The assets and equities of the NOP Partnership at the end of its fiscal year on October 31, 2012
are as follows:
Cash P 150,000 Liabilities P 500,000
Receivables- net 200,000 Loan from Perez 100,000
Inventory 400,000 Nera, Capital(30%) 450,000
Plant Assets- net 700,000 Ochoa, Capital (50%) 300,000
Loan to Ochoa 50,000 Perez, Capital (20%) 150,000
P 1,500,000 P 1,500,000
The partners decided to liquidate the partnership. They estimate that the non-cash assets other
than the loan to Ochoa can be converted into P1,000,000 cash over the two-month period ending
December 31, 2012. Cash is to be distributed to the appropriate parties as it becomes available
during the liquidation process. The partner most vulnerable to partnership losses on liquidation is:
a. Nera
b. Ochoa
c. Perez
d. Nera and Ochoa equally
31. Using the information in number 30 and assuming that the P650,000 is available for the first
distribuion, it should be paid to:
Priority creditors Nera Ochoa Perez
a. P500,000 P 50,000 P -0- P100,000
b. P500,000 P120,000 P -0- P 30,000
c. P600,000 P 15,000 P 25,000 P 10,000
d. P600,000 P 50,000 P -0- P -0-
32. Using the information in number 30 and assuming that a total amount of P75,000 is available
for distribution to partners after all non-partner liabilities are paid, it should be paid as follows:
Nera Ochoa Perez
a. -0- P 37,500 P 37,500
b. P 22,500 P 37,500 P 15,000
c. P 25,000 P 25,000 P 25,000
d. P 75,000 -0- -0-
33.The following Statement of Financial Position summary, together with the residual profit sharing
ratios, was developed on April 1, 2012, when the RST Partnership began its liquidation:
Cash P Liabilities P
28,000 120,000
Accounts Receivable Loan from Santos
120,000 40,000
Inventories Reyes, Capital
170,000 150,000
Plant Assets- net Santos, Capital
400,000 400,000
Loan to Reyes Torres, Capital
50,000 300,000

P 1,020,000 P 1,020,000
If available cash except for a P10,000 contingency fund is distributed immediately, Reyes, Santos
and Torres, respectively, should receive:
a. P-0-; P140,000; P10,000
b. P-0-; P145,000; P15,000
c. P-0-; P160,000; P30,000
d. P32,000; P64,000; P64,000

34. Partners Roger, Sergio and Tito, who share profit and loss in the ratio of 3:5:2, respectively,
have decided to liquidate their partnership. The Statement of Financial Position of the partnership
at the time of liquidation is:
ASSETS LIABILITIES AND CAPITAL
Cash P 120,000 Accounts Payable P 93,000
Other Assets 360,000 Loan from Sergio 30,000
Roger, Capital 108,000
Sergio, Capital 120,000
Tito, Capital 129,000
P480,000 Total Liabilities and Capital P480,000
The partners desire to prepare an installment distribution schedule showing how cash would be distributed
to partners as assets are realized. In the schedule of maximum absorbable loss, the maximum absorbable loss for
each partner would be:
Roger Sergio Tito
a. P 360,000 P 240,000 P 645,000
b. P 300,000 P 600,000 P 225,000
c. P 450,000 P 525,000 P 375,000
d. P 360,000 P 300,000 P 645,000

35. Using the information in number 34, the program of priorities would indicate that the first cash distributed,
after the payment of outside creditors, would be distributed to:
a. Roger in the amount of P48,000
b. Sergio in the amount of P60,000
c. Tito in the amount of P57,000
d. Tito in the amount of P30,000

36. Using the information in number 34 and assuming that the first sale of other assets having book value of
P150,000 realized P45,000 and all available cash is distributed, the respective partners would receive:
Roger Sergio Tito
a. -0- P 18,000 P 54,000
b. P 9,000 -0- P 63,000
c. P 24,000 P 24,000 P 24,000
d. P 63,000 -0- P 9,000

37. Using the information in number 34 and assuming that the other assets (assume previous first sale facts)
having book value of P90,000 realized P120,000 and all available cash is distributed, the respective partners
would receive:
Roger Sergio Tito
a. -0- P 18,000 P 12,000
b. P 9,000 P 15,000 P 6,000
c. P18,000 -0- P 12,000
d. P 40,500 P 52,500 P 27,000

38. Three partners profit and who share profits and losses equally are to incorporate their business. The capital
accounts show the following: Jacinto, P400,000; Mapa,P600,000 and Magno, P1,000,000.
It is agreed that the three will incorporate their business. Combined, the net assets amounts to P2M which
will be revalued at P2.6M based on current market value. The ordinary share capital of the corporation will have
a par value of P100. Upon incorporation, the partners are to receive shares of stocks follows:
Jacinto Mapa Magno
a. P 8,667 P 8,666 P 8,666
b. P 4,000 P 6,000 P 10,000
c. P 5,200 P 7,800 P 13,000
d. P 6,000 P 8,000 P 12,000

39. Partners Ramon and Carlos who share equally in the profits and losses had the following Statement of
Financial Position as of December 31, 2012.
ASSETS LIABILITIES AND CAPITAL
Cash P 120,000 Accounts Payable P 172,000
Accounts Receivable 100,000 Ramon, Capital 140,000
Merchandise Inventory 140,000 Carlos, Capital 120,000
Equipment 80,000
Accumulated Depreciation (8,000)
Total Assets P 432,000 Total Liabilities and Capital P 432,000
Partners agreed to incorporate and have the new corporation absorb all the assets and assume the
liabilities of the partnership after effecting the following adjustments:
 Provision of allowance for uncollectible accounts of P10,000.
 Recording the merchandise Inventory at fair market value of P160,000.
 Further depreciation of the equipment by P3,000.
 The corporation’s ordinary share capital has a par value of P100 and partners were issued the
corresponding shares of stock equivalent to their adjusted capital accounts in the amount of:
a. P 267,000
b. P 273,000
c. P 277,000
d. P 280,000

40. Roldan and Moses are partners sharing profits and losses in the ratio of 1:2 respectively. On July 1, 2012, they
decided to form the R and M Corporation by transferring the assets and liabilities from the partnership to the
corporation in exchange of its share capital. The post-closing trial balance of the partnership is shown below:
Debit
Cash P 45,000
Accounts Receivable-net 60,000
Inventory 90,000
Plant Assets-net 174,000
Liabilities P 60,000
Roldan, Capital 94,800
Moises, Capital 214,200
P 369,000 P 369,000
It was agreed that the adjustments be made to the following assets to be transferred to the corporation:
Accounts Receivable, P40,000; Inventory, P68,000; Plant Assets, P180,600. The R and M corporation was
authorized to issue P100 par preference share capital and P10 par ordinary share capital. Roldan and Moises
agreed to receive for their equity in the partnership, 720 shares of the ordinary share each, plus preference
share for their remaining interest.
The total number of preference and ordinary shares issued by the corporation in exchange of the assets
and liabilities of the partnership are:
Preference Ordinary
a. 2,540 shares 1,500 shares
b. 2,592 shares 1,440 shares
c. 2,642 shares 1,440 shares
d. 2,642 shares 1,550 shares