Reference no: EM132948721
Question - The partnership of Joe, Al, and Mike shares profits and losses 40%, 40%, and 20%, respectively. On January 1, 2021, the partners voted to dissolve the partnership, at which time the assets, liabilities, and capital balances were as follows:
Assets Liabilities and Capital
Cash P400,000 Accounts Payable P900,000
Other Assets 1,200,000 Loan Payable to Al 100,000
Joe, Capital 350,000
Al, Capital 130,000
Mike, Capital 120,000
Total P1,600,000 Total P1,600,000
All of the partners are personally insolvent. Assume that all noncash assets were sold for P700,000 and all available cash is distributed in final liquidation of the partnership.
Required - Compute the cash distribution upon liquidation to each of the partners, which are to be entered in the next three questions.