Reference no: EM132808837

AK, BS and CM are partners in a business being liquidated. The partnership has cash of P132,000, noncash assets with a book value of P1584,000 and liabilities of P1,039500. The following data relates to the partners as of June 1, 2013: AK has capital balance of P775,000, personal assets of P165,000, personal liabilities of P82500.

• BS extended a loan to the partnership in the amount of P82500, de?cit of P231,000, personal assets of P247500, personal liabilities of P99,000. CM has a capital balance of P49500, personal assets of P412500 and personal liabilities of P247500. Their pro?t and loss ratio is 3:1:1 AK, BS, and CM, respectively.
• On June 12, 2013, assets with a book value of P495,000 were sold for P330,000 cash. The proceeds were used to pay off liabilities of the partnership. During the remainder ofJune, no additional assets were realized and outside creditors began to pressure the partnership for payment. On July 3, the partners agreed to contribute personal assets, to whatever extent possible, in order to eliminate their respective deficits. Shortly thereafter, assets with book value of P330,000 and a fair value of P379500 were distributed to AK.

Problem 1: Assuming additional noncash assets with book value of P660,000 were sold in July for P891,000. How much cash would be distributed to CM?

A. P72,600

B. P23,100

C. P52,800

D. P3500