Reference no: EM132759817

The partnership of MM, NN and OO was dissolved on October 31, 2009 and the account balances after all noncash assets are converted to cash on Nov. 1, 2009, along with residual P/L sharing ratios, are:

Cash P50,000                                     Accounts payable P120,000
NN, Capital (30%) 60,000                           MM, Capital (30%) 90,000
OO, Capital (40%) 100,000

Personal assets and liabilities of the partners at November 1, 2009 are:

                Personal Assets              Personal Liabilities
MM         P80,000                         P90,000
NN          100,000                         61,000
OO            190,000                        80,000

Problem 1: If OO contributed P70,000 to the partnership to provide cash to pay the creditors, what amount of M's P90,000 partnership equity would appear to be recoverable:

A. P90,000
B. P81,000
C. P79,000
D. P0