PROBLEM

4-4
1. Compute the amount of the realization
loss on the sale of the other assets.

Bina, capital before liquidation P320,000

Payment to Bina 128,000
Loss absorbed by Bina (40%) P192,000
Loss on realization (P192,000  40%) P480,000
 2. Prepare the statement of
partnership liquidation.

AIDA, BINA & CELIA

Statement of Partnership Liquidation
January 1, 2013

Capital
Cash Other Assets Aida Bina Celia

Balances before liquidation P80,000 P720,000 P320,000 P320,000 P160,000

Realization & dist. of loss 240,000 ( 720,000) ( 240,000) ( 192,000) ( 48,000)
Balances 320,000 – 80,000 128,000 112,000
Settlement to partners (320,000) _______ ( 80,000) ( 128,000) ( 112,000)
 3.Prepare all pertinent entries.

a. Realization of other asset and loss distribution.

Cash 240,000
Aida, Capital 240,000
Bina, Capital 192,000
Celia, Capital 48,000
Other Assets 720,000

b. Capital Distribution

Aida, Capital 80,000

Bina, Capital 128,000
Celia, Capital 112,000
Cash 320,000