Reference no: EM132773021

On August 2, 2019, the partners of EZA Partnership decided to terminate their partnership. The following are the ledger balances of accounts EZA Partnership prior to the liquidation process:

Cash P120,000
Accounts Receivable 100,000
Inventories 120,000
Land 200,000
Building 400,000
Furniture 40,000
Loans payable- Amy P20,000
Liabilities 200,000
Ela, Capital (50%) 400,000
Zaza Capital(30%) 300,000
Amy, Capital(20%) 60,000

• The partnership is to be liquidated by instalment. The following are the transaction that transpired after the decision to liquidate:
• August 15 Non cash assets with a book value of 200,000 were sold at P150,000. Expenses of P10,000 was incurred. Outside creditors were paid in full. The remaining cash was distributed to partners after setting aside P20,000 for future liquidation expenses.
• August 30 Non cash assets with a book value of P200,000 were sold at P220,000. All cash were distributed to partner
• September 5 The remaining non cash assets were sold at book value.

Required:

Problem 1: Prepare the statement of liquidation and cash priority program on the books of partnership.