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AA, BB, CC and DD are partners sharing profits in the ratio of 3:4:6:8, respectively. Their capital balances on December 31, 2019 are as follows:
AA = P500; BB = P12,500; CC = P12,500; and DD = P4,500
The partners decide to liquidate their firm and they accordingly convert the non-cash assets into P11,600 cash. After paying liabilities of P1,500, they have P11,100 to divide.
Problem 1: What is the gain (loss) on realization?
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