Reference no: EM132894161

The assets and equities of the NSW Partnership at the end of its fiscal year, October 31, 2020, are as follows: Profit and loss agreement is 30:50:20.

Cash                                  P 150,000

Accounts receivable -net        200,000

Inventory                               400,000

Plant Assets - net                     700,000

Loan to South                          50,000

Liabilities                              P 500,000

West, Loan                              100,000

North, Capital                           450,000

South, Capital                             300,000

West, Capital                               150,000

The partners decide to liquidate the partnership. They estimate that the non-cash assets other than the loan to South can be realized into P 1,000,000 over the two-month period ending December 31, 2020. Cash is to be distributed to the appropriate parties as it becomes available during the liquidation process.

Required:

Problem a) Assuming that P 650,000 is available for the first distribution, show how the available cash would be distributed.

Problem b) Assuming that a total amount of P 75,000 is available for distribution to partners after liabilities to outside creditors have been paid, show how the cash will be distributed to the partners.