Reference no: EM132901249

The balance sheet accounts of partners A, B and C before liquidation are the following:

Cash, P360,000;

Non-Cash Assets, P1,790,000;

Liabilities, P1,000,000;

A, Capital (50%), P460,000;

B, Capital (30%), P370,000 and

C, Capital (20%), P320,000.

On the first month of liquidation, assets with a book value of P1,400,000 are sold for P1,060,000. Liquidation expenses of P40,000 are paid and additional expenses are anticipated. Liabilities are paid amounting to P362,000, and sufficient cash is retained to ensure the payment to creditors before making payment to partners. In the first payment of cash to partners, B received P100,000.

Problem 1: Amount of cash withheld for future liquidation expenses