The following statement of financial position account balances for the partnership of Pierce, Garnett, and Rondo, the following: Cash - P 160,000; Other assets - P 320,000Liabilities - P 180,000; Pierce, Capital - P 48,000; Garnett, Capital - P 216,000; Rondo, Capital - P 36,000. The partners agree to dissolve the partnership after selling the other assets. If Pierce is to receive a final settlement of P 180,000, how much should be the proceeds from the sale of the non-cash assets?

Assuming that the non-cash assets were sold at a loss of P 70,000, how much would be the total capital of the partners immediately before the final distribution of cash?

Assuming that the non-cash assets were sold for P 120,00, how much would be received by Garnett in the final distribution of cash? Assume that any partner incurring a capital deficiency is insolvent.

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Note In solving these questions we will use the statement of liquidation for better visualization of the process Further explanation in the Explanation tab Assumption 1 Pierce is to receive final sett... View the full answer