ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

CPA Review Batch 43  May 2022 CPA Licensure Examination  Weeks 2-3

ADVANCED FINANCIAL ACCOUNTING & REPORTING A. DAYAG  G. CAIGA  M. NGINA

AFAR-02: PARTNERSHIP DISSOLUTION &LIQUIDATION

I – No Dissolution: Assignment of Interest
Capital balances and profit and loss sharing ratios of the partners in the ABC Partnership are as follows:
A, capital (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 168,000
B, capital (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,000
C, capital (20%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 480,000
A needs money and agrees to assign one – fourth of his interest in the partnership to D for P45,000 cash. D
pays P45,000 directly to A. Compute the (1) capital balance of D, and (2) the total capital of the ABC
Partnership immediately after the assignment of the interest to D?
a. (1) P42,000; (2) P547,200 c. (1) P42,000; (2) P480,000
b. (1) P67,200; (2) P480,000 d. (1) P67,200; (2) P547,200

II – Dissolution: Admission of a New Partner - Admission By Purchase / Admission By Investment

A partnership had the following condensed balance sheet:
Assets Liabilities and Capital
Cash……………………………….....P 2,500 Liabilities……………………………….............P 7,500
Noncash assets…………………..... 32,500 XX, capital 80%)……………………............... 20,000
XX, loan…………………………....... 2,500 YY, capital(20%)..……………………............. 10,000
Total……………………………….....P37,500 Total……………………………………............P37,500

The percentages in parentheses after the partner’s capital balances represent their respective interests in
profits and losses. The partners agree to admit ZZ as a member of the firm.
Situation 1: ZZ purchases a ¼ interest in the firm. One-fourth of each partner’s capital is to be transferred to
the new partner. ZZ pays the partners P7,500 which is divided between them in proportion to the equities
given up. The capital balances of XX, YY, and ZZ after should be:
XX YY ZZ XX YY ZZ
a. P15,000 P 7,500 P 9,375 c. P15,000 P7,500 P7,500
b. 12,500 12,500 12,500 d. 10,000 10,000 10,000
Situation 2: ZZ invests P10,000 in cash for ¼ ownership interest. The money goes to the original partners
1. The capital balances of XX, YY, ZZ after the admission assuming if book value method is used should be:
XX YY ZZ XX YY ZZ
a. P15,000 P 7,500 P 9,375 c. P15,000 P7,500 P7,500
b. 12,500 12,500 12,500 d. 10,000 10,000 10,000
2. The partnership gain (or gain to be recognized in partnership books).
a. P 0 c. P 2,500
b. P625 d. P10,000
3. The gain to be recognized by XX and YY
a. P 0 c. P 2,500
b. P625 d. P10,000
4. If revaluation/adjustments in assets are recognized, the capital balances of XX, YY and ZZ after the
admission should be:
XX YY ZZ XX YY ZZ
a. P15,000 P7,500 P 9,375 c. P15,000 P7,500 P 7,500
b. P19,500 P8,625 P10,000 d. P21,000 P9,000 P10,000
Situation 3: ZZ purchases a ¼ interest in the firm. One fourth of each partner’s capital is to be transferred to
the new partner. ZZ pays the partners P6,000, which is divided between them in proportion to the equities
given up.
1. The capital balances of XX, YY, and ZZ after the admission if book value method (no adjustments/no
revaluation) method is used should be:
XX YY ZZ XX YY ZZ
a. P15,000 P 7,500 P 9,375 c. P15,000 P 7,500 P 7,500
b. P12,500 P12,500 P12,500 d. P10,000 P10,000 P10,000
2. The partnership loss (or loss to be recognized in partnership books).
a. P 0 c. P3,375
b. P1,500 d. P6,000
3. The loss to be recognized by XX and YY
a. P 0 c. P3,375
b. P1,500 d. P6,000

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4. If revaluation/adjustments in assets are recognized, the capital balances of XX, YY, and ZZ after the
admission should be:
XX YY ZZ XX YY ZZ
a. P15,000 P7,500 P9,375 c. P15,000 P 7,500 P7,500
b. 11,400 6,600 6,000 d. 21,000 9,000 10,000
Situation 4: ZZ invests P15,000 for a 1/3 interest in the firm. The total agreed capital is P45,000. The capital
balances of XX, YY and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P15,000 P7,500 P10,000 c. P15,000 P 7,500 P15,000
b. 21,500 10,375 10,000 d. 20,000 10,000 15,000
Situation 5: ZZ invests P12,500 for a ¼ interest in the firm. The total agreed capital is P42,500.
1. The capital balances of XX, YY, and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P15,000 P 7,500 P 9,375 c. P15,000 P 7,500 P 7,500
b. 21,500 10,375 10,625 d. 21,000 9,000 10,000
2. The new profit and loss of all partners after ZZ’s admission should be:
XX YY ZZ XX YY ZZ
a. 50% 25% 25% c. 33% 33% 34%
b. 80% 20% 25% d. 60% 15% 25%
Situation 6: New partner ZZ conveyed a tangible assets with a fair value of P16,250 with an assumed
mortgage of P2,500 in exchange for a 35% interest in capital, keeping in mind that ZZ would be acquiring
a ¼ interest in profits. The capital balances of XX, YY, and ZZ after the admission if bonus method is used
should be:
XX YY ZZ XX YY ZZ
a. P18,750 P9,687.50 P15,312.50 c. P15,000 P7,500 P7,500
b. 21,500 10,375 10,625 d. 21,000 9,000 10,000
Situation 7: New Partner ZZ conveyed non-cash assets with a fair value of P7,500 in exchange for a 30%
interest in capital and a 1/5 interest in profits. The total agreed capital after admission is P40,000.
1. The capital balances of XX, YY, and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P18,400 P9,600 P12,000 c. P15,000 P7,500 P7,500
b. 21,500 10,375 10,625 d. 21,000 9,000 10,000
2. The new profit and loss of all partners after ZZ’s admission should be:
XX YY ZZ XX YY ZZ
a. 50% 25% 25% c. 33% 33% 34%
b. 60% 15% 25% d. 64% 16% 20%
Situation 8: ZZ invests P7,500 for a 40% interest in the firm:
1. If bonus method is recognized, the capital balances of XX. YY and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P20,000 P10,000 P20,000 c. P14,000 P10,000 P15,000
b. 20,000 10,000 7,500 d. 14,000 8,500 15,000
2. If goodwill method is recognized, the capital balances of XX, YY and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P20,000 P10,000 P20,000 c. P15,000 P 7,500 P 7,500
b. P20,000 P10,000 P 7,500 d. P14,000 P 8,500 P15,000
3. If goodwill/adjustment in assets method is recognized and the goodwill allotted to YY amounted to
P1,000, the capital balances of XX, YY and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P20,000 P10,000 P10,000 c. P20,000 P10,000 P 7,500
b. P24,000 P11,000 P 7,500 d. P14,000 P 8,500 P15,000
Situation 9: ZZ invests P20,000 in the firm, P5,000 is considered a bonus to Partners XX and YY.
XX YY ZZ XX YY ZZ
a. P16,000 P 9,000 P 7,500 c. P20,000 P10,000 P 7,500
b. 24,000 11,000 15,000 d. 14,000 8,500 15,000
Situation 10: ZZ invests P20,000 in the firm and is allowed a credit of P6,000 for goodwill upon admission.
XX YY ZZ XX YY ZZ
a. P16,000 P9,000 P15,000 c. P20,000 P10,000 P26,000
b. 24,000 1,000 15,000 d. 24,000 11,000 26,000

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Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

Situation 11: ZZ invests P15,000 for a 37.5% interest in the firm. The total firm capital is to be P40,000 and
partners agree that their capital balances should be made to equal to their new profit and loss ratio.
1. How do you account for the difference in total capital before and after admission and how much?
a. Goodwill, P 0 c. Bonus, P5,000
b. Withdrawal, P5,000 d. Negative goodwill, P5,000
2. The capital balances of XX, YY, and ZZ after the admission should be:
XX YY ZZ XX YY ZZ
a. P18,400 P 9,600 P12,000 c. P16,000 P9,000 P15,000
b. P21,500 P10,375 P10,625 d. P20,000 P5,000 P15,000
3. The new profit and loss of all partners after ZZ’s admission should be:
XX YY ZZ XX YY ZZ
a. 50% 12.5% 37.5% c. 33% 33% 34%
b. 80% 20.0% - d. 64% 16% 20%
II – Admission By Purchase
The capital accounts of the partnership of Newton, Sharman, and Jackson on June 1, 20x4, are presented,
along with their respective profit and loss ratios:
Newton……………………………………………………………… P139,200 1/2
Sharman…………………………………………………………….. 208,800 1/3
Jackson…………………………………………………….………… 96,000 1/6
P 444,000
On June 1, 20x4, Sidney was admitted to the partnership when he purchased, for P132,000, a proportionate
interest from Newton and Sharman in the net assets and profits of the partnership. As a result of this
transaction, Sidney acquired a one-fifth interest in the net assets and profits of the firm. Assuming that
implied goodwill is not to be recorded, what is the combined gain realized by Newton and Sharman upon
the sale of a portion of their interests in the partnership to Sidney?
a. P -0- c. P62,400
b. P43,200 d. P82,000
III – Admission by Purchase
LL and QQ are partners with capital balances of P25,000 and P35,000, respectively, and they share profits
and losses equally. The partners agree to take DD into the partnership for a 40% interest in capital and
profits, while LL and QQ each retain a 30% interest. DD pays P30,000 cash directly to LL and QQ for his 40%
interest, and total revaluation of asset (or goodwill implied) by DD’s payment is recognized on the
partnership books. If LL and QQ transfer equal amounts of capital to DD, the capital balances after DD’s
admittance will be:
a. LL, P17,500; QQ, P27,500; DD, P30,000 c. LL, P18,000; QQ, P18,000; DD, P24,000
b. LL, P22,500; QQ, P22,500; DD, P30,000 d. LL, P13,000; QQ, P23,000; DD, P24,000
IV – Admission By Investment
On January 31, 20x4, partners of Lon, Mac & Nan Partnership, had the following loan and capital account
balances (after closing entries for January):
Loan receivable from Lon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 20,000 Dr
Loan payable to Nan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 Cr
Lon, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 Dr
Mac, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Cr
Nan, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 Cr
The partnership’s income sharing ratio was Lon, 50%; Mac, 20%, and Nan, 30%.On January 31, 20x4, Ole
was admitted to the partnership for a 20% interest in total capital of the partnership in exchange for an
investment of P40,000 cash. Prior to Ole’s admission, the existing partners agreed to increase the carrying
amount of the partnership’s inventories to current fair value, a P60,000 increase. The capital account to be
credited to Ole:
a. P60,000 c. P52,000
b. P40,000 d. P46,000
V – Admission by Purchase and Investment
In the AD partnership, Allen’s capital is P70,000 and Daniel’s is P20,000 and they share income in a 3:1 ratio
respectively. They decide to admit David to the partnership. Each of the following questions is independent
of the others.
1. David directly purchases a one-fifth interest by paying Allen P17,000 and Daniel P5,000. The land account
is increased before David is admitted. By what amount is the land account increased?
a. P20,000 c. P10,000
b. P18,000 d. P 5,000

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2. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before
David is admitted. David invests P20,000 for a one-fifth interest. What is the amount of inventory written
down?
a. P2,000 c. P7,500
b. P5,000 d. P10,000
VI – Admission by Purchase and Investment
The following are the capital account balances and the profits and loss ratio of the partners in Motorola
Company on December 31, 2021:
Capital account balances Profit and loss ratio
MM……………………………… …………. P 60,000 25%
TT………………………………… …………. 80,000 50%
RR……………………………….. …………. 200,000 25%
On January 1, 2022, LL is admitted to the partnership under the following agreement:
a. LL is to share 1/3 in the profits and loss while the other partners continue to participate
in profits and loss ratio in their original ratio.
b. LL is to pay TT, P24,000 for a ¼ interest f the latter’s equity in the partnership net assets and is to invest
P140,000 cash in the partnership.
c. LL’s capital account after the admission is to show P150,000 and the total capital is
P520,000.
1. The capital account balances of the partners after LL’s admission are:
a. MM, P73,500; TT, P83,000; RR, P213,500; LL, P150,000
b. MM, P62,500; TT, P65,000; RR, P202,500; LL, P150,000
c. MM, P69,183; TT, P78,372; RR, P209,168; LL, P150,000
d. MM, P72,500; TT, P85,000; RR, P212,500; LL, P150,000
2. The new profit and loss ratio of all partners after LL’s admission:
a. MM, 25.00%; TT, 50.00%; RR, 25.00%; LL, 33.33%
b. MM, 18.75%; TT, 37.50%; RR, 18.75%; LL, 25.00%
c. MM, 25.00%; TT, 25.00%; RR, 25.00%; LL, 25.00%
d. MM, 16.67%; TT, 33.33%; RR, 16.67%; LL, 33.33%
VII – Admission By Investment Comparing Bonus and Goodwill
XX and YY are partners who have capital of P300,000 and P240,000 sharing profits in the ratio of 3:2. ZZ is
admitted as a partner upon investing P250,000 for 25% interests in the firm, profits are to be allocated
equally. Given the choice between goodwill and bonus method, ZZ will:
a. Prefer bonus method due to ZZ’s gain of P17,500
b. Prefer bonus method due to ZZ’s gain of P70,000
c. Prefer goodwill method due to ZZ’s gain of P70,000
d. Be indifferent for the goodwill and bonus methods are the same
Answer - a
Bonus Method: Goodwill Method
CC AC Bonus CC AC Goodwill
XX 300,000 331,500 31,500 3/5 XX 300,000 426,000 126,000
YY 240,000 261,000 21,000 2/5 YY 240,000 324,000 84,000
540,000 592,500 52,500 540,000 750,000 210,000
ZZ 250,000 197,500 (52,500) ZZ 250,000 250,000 -0-
790,000 790,000 -0- 790,000 1,000,000 210,000

For purposes of comparing bonus and goodwill, goodwill is assumed not realized and it should be written-
off outright as a loss, therefore:
XX YY ZZ
Capital balances if Goodwill Method is used P426,000 P 324,000 P 250,000
Less: Write-off of Goodwill (equally) __70,000 __70,000 __70,000
Capital balance after write-off of goodwill P356,000 P 254,000 P180,000
Capital balance if Bonus Method is used 331,500 261,000 _197,500
Gain (loss) if Bonus Method is used P 24,500 P( 7,000) P 17,500
VIII – Admission by Investment Comparing Bonus and Goodwill
XX and YY are partners who have capital of P300,000 and P240,000 sharing profits in the ratio of 3:2. ZZ is
admitted as a partner upon investing P250,000 for 25% interests in the firm, white the other partners continue
to participate profits and losses in their original ratio. Given the choice between goodwill and bonus
method, ZZ will:
a. Prefer bonus method due to ZZ’s gain of P17,500
b. Prefer bonus method due to ZZ’s gain of P70,000
c. Prefer goodwill method due to ZZ’s gain of P70,000
d. Be indifferent for the goodwill and bonus methods are the same.
Answer - d

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
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Bonus Method: Goodwill Method:

CC AC Bonus CC AC Goodwill
XX 300,000 331,500 31,500 3/5 XX 300,000 426,000 126,000
YY 240,000 261,000 21,000 2/5 YY 240,000 _324,000 __84,000
540,000 592,500 52,500 590,000 750,000 210,000
ZZ 250,000 197,500 (52,500) ZZ 250,000 _250,000 ______-0-
790,000 790,000 -0- 790,000 1,000,000 210,000

For purposes of comparing bonus and goodwill, goodwill is assumed not realized and it should be written-off outright
as a loss, therefore:
XX YY ZZ
Capital balances if Goodwill Method is used P 426,000 P 324,000 P 250,000
Less: Write-off of Goodwill (45%:30%:25%) ___94,500 ___63,000 ___52,500
Capital balance after write-off of goodwill P 331,500 P 261,000 P 197,500
Capital balance if Bonus Method is used __331,500 __261,000 __197,500
Gain (loss) if Bonus Method is used P -0- P -0- P -0-
The revised new profit and loss ratio are as follows:
XX: (75% x 3/5)……………………………………………………… 45%
YY: (75% x 2/5)……………………………………………………… 30%
ZZ: ……………………………………………………………………… 25%
Note: For purposes of comparing bonus and goodwill, and the goodwill is assumed not realized and the old partners still continue to
use the original profit and loss ratio (revised new profit and loss ratio based on the original profit and loss ratio of the old partners), the
partner selecting the alternative may choose either bonus or goodwill method, anyway, it may result to the same amount of capital
balance (refer to Problem VIII). However, such is not the case, where partners used an entirely new profit and loss ratio (refer to
Problem VII).
Retirement or Withdrawal of Partner(s)
IX – Payment from Partnership Funds
DD, EE and FF are partners sharing profits and losses of 50%, 30% and 20%, respectively. The December 31,
2019 balance sheet of the partnership before any profit allocation was summarized as follows:
ASSETS LIABILITES AND CAPITAL
Cash………………………………………P 60,000 Accounts payable……………………………P 4,000
Inventories………………………………. 40,000 FF, loan………………………….………. …….. 3,000
Furn. & Fixt. (net)………………………..
50,000 DD, capital…………………………………….. 70,000
Patent.……………………………………. 15,000 EE, capital……………………………………… 60,000
FF, capital……………………………………… 30,000
________ FF, drawings……………………………………( 2,000)
Total assets………………………………P 165,000 Total liabilities & capital……………………..P165,000
The partnership net income for the year amounted to P30,000. On January 1, 2020, FF has decided to retire from the
partnership and by mutual agreement among partners; the following have been arrived at:
a. Inventories amounting to P5,000 is considered obsolete and must be written-off.
b. Furniture and fixtures should be adjusted to their current value of P65,000.
c. Patents are considered worthless and must be written-off immediately before the retirement of FF.
It was agreed that the partnership will pay FF for his interest in the partnership inclusive of loan balance.
1. The interest of FF immediately before his retirement amounted to:
a. P37,000 c. P35,000
b. P36,000 d. P24,000
2. FF retires by receiving P36,000 cash (payment at book value), the capital balances of DD and
EE after the retirement of FF:
a. DD, P82,500; EE, P67,500 c. DD, P67,500; EE, P58,500
b. DD, P85,000; EE, P69,000 d. DD, P57,500; EE, P52,500
3. FF retires by receiving P38,000 cash (payment at more than book value), using bonus method, the capital
balances of DD and EE after the retirement of FF:
a. DD, P81,250; EE, P66,750 c. DD, P81,875; EE, P67,125
b. DD, P83,750; EE, P68,250 d. DD, 82,500; EE, P67,500
4. FF retires by receiving P38,000 cash (payment at more than book value), using partial goodwill method,
the capital balances of DD and EE after the retirement of FF:
a. DD, P81,250; EE, P66,750 c. DD, P81,875; EE, P67,125
b. DD, P83,750; EE, P68,250 d. DD, 82,500; EE, P67,500
5. FF retires b receiving P38,000 cash (payment at more than book value), using total (implied) goodwill
method, the capital balances of DD and EE after the retirement of FF:
a. DD, P87,500; EE, P70,500 c. DD, 85,500; EE, P69,500
b. DD, P83,750; EE, P68,250 d. DD, 82,500; EE, P67,500
6. FF retires by receiving P34,500 cash (payment at less than book value), using bonus method, the capital
balances of DD and EE after the retirement of FF:
a. DD, P82,812.50; EE, P67,687.50 c. DD, 83,437.50; EE, P68,062.50
b. DD, P84,062.50; EE, P68,437.50 d. DD, 82,500; EE, P67,500

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
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7. FF retires by receiving P34,500 cash (payment at less than book value), using specific adjustment in assets,
the capital balances of DD and EE after the retirement of FF:
a. DD, P82,812.50; EE, P67,687.50 c. DD, P83,437.50; EE, P68,062.50
b. DD, P84,062.50; EE, P68,437.50 d. DD, P82,500; EE, P67,500
8. FF retires by receiving P34,500 cash (payment at less than book value), using assets write-down traceable
to the entire entity, the capital balances of DD and EE after the retirement of FF:
a. DD, P82,812.50; EE, P67,687.50 c. DD, P65,250; EE, P66,000
b. DD, P84,062.50; EE, P68,437.50 d. DD, P78,750; EE, P65,250
X
Erika, Fredric and Gustav are partners in a manufacturing concern. Relevant data regarding income-
sharing relationships and capital balances are as follows:
Partner Capital Balance Income Share
Erica P 150,000 35%
Fredric 100,000 30%
Gustav 200,000 35%
Fredric decides to retire and receives P145,000 in cash from the partnership.
1. If the bonus method is used to account for the retirement, Erica's capital balance subsequent to Fredric's
retirement will be:
a. P105,000 c. P134,250
b. P127,500 d. P150,000
2. If the excess payment is attributed entirely to goodwill and the partial goodwill approach is used,
goodwill will be recognized at:
a. P 45,000 c. P100,000
b. P 55,000 d. P150,000
3. If the excess payment is attributed entirely to goodwill, and the total goodwill approach is used, Gustav's
capital balance after Fredric's departure will be:
a. P200,000 c. P263,000
b. P252,500 d P275,000
4. Using the partial goodwill approach, Erica's capital balance, after Fredric's departure, will be:
a. P127,500 c. P150,000
b. P134,250 d. P165,750

Partnership Liquidation
XI – Statement of Liquidation: Lump-sum
Assume the following data for QRS Partnership had the following condensed balance sheet just before
liquidation on November 1, 20x4, reports the following balances:
Assets Liabilities and Capital
Cash . . . . . . . . . . . . . . . . . . . . . . . P 24,000 Liabilities . . . . . . . . . . . . . . . . . . P 12,000
Noncash assets . . . . . . . . . . . . . . 84,000 Q, loans . . . . . . . . . . . . . . . . . . 2,400
Q, capital(30%) . . . . . . . . . . . . 9,600
R, capital (50%) . . . . . . . . . . . . 48,000
________ S, capital (20%) . . . . . . . . . . . . 36,000
P108,000 P108,000
Required: Prepare statement of liquidation, assuming, the noncash assets includes goodwill of P54,000 and
prepaid expenses of P18,000. The partners agreed to write-off these accounts since they are valueless. The
remaining noncash assets were realized at P1,200 with liquidation expenses paid amounting to P14,400.
The personal assets and liabilities of the partners on this date are as follows:
Personal Assets Partnership Liabilities
Q………………………………… P 240,000 P204,000
R…………………………………. 216,000 192,000
S…………………………………. 108,000 112,800
XII – Lump-sum: Incomplete Data
Silverio, Domingo, Reyes, and Pasko are partners sharing earnngs in the ratio of 3/21; 4/21; 6/21 and 8/21.
The balances of their capital accounts on December 31,2022 are as follows:
Silverio…………………………………………………………………… P 1,000
Domingo………………………………………………………………… 25,000
Reyes……………………………………………………………………… 25,000
Pasko……………………………………………………………………… 9,000
P 60,000

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

The partners decided to liquidate, and they accordingly convert the non-cash assets into P23,200 of cash.
After paying the liabilities amounting to P3,000, they have P22,200 to divide. Assume that a debit balance
of any partner’s capital is uncollectible.
Determine:
1. The cash balance before realization amounted to:
a. Zero c. P63,000
b. P2,000 d. Incomplete data
2. The book value of the non-cash assets amounted to:
a. P25,200 c. P61,000
b. P45,400 d. P63,000
3. The share of Silverio in the loss upon conversion of the non-cash assets into cash was:
a. P4,972 c. P5,400
b. P5,257 d. None
4. The cash received by Domingo amounted to:
a. None c. P17,800
b. P13,880 d. P25,000
5. The cash received by Reyes amounted to:
a. None c. P14,200
b. P8,320 d. P25,000
6. The loss on realization amounted to:
a. None c. P37,800
b. P23,200 d. P60,000
7. After the P22,200 was divided, the capital balance of Domingo was:
a. P3,200 c. P4,400
b. P3,920 d. P17,800

XIII – Statement of Liquidation: Installment;

Schedule of Safe Payments and Cash Payment Priority Program
Assume A, B, C, and D are partners sharing profits 40%: 20%: 20%: 20%, respectively. On January 1, 20x4,
they agree to liquidate. A balance sheet prepared on this date is shown as follows:
Assets Liabilities and Capital
Noncash assets . . . . . . . . . . . P 181,800 Liabilities . . . . . . . . . . . . . . . . . P 84,000
A, loan . . . . . . . . . . . . . . . . . . . 6,000
D, loan . . . . . . . . . . . . . . . . . . . 3,000
A, capital . . . . . . . . . . . . . . . . . 26,400
B, capital . . . . . . . . . . . . . . . . . 25,800
C, capital . . . . . . . . . . . . . . . . . 20,400
_________ D, capital . . . . . . . . . . . . . . . . ___16,200
Total . . . . . . . . . . . . . . . . . . . . P 181,800 Total . . . . . . . . . . . . . . . . . . . . . P 181,800
The results of liquidation are summarized below:
Costs of
Cash proceeds Book value liquidation Payment
on Sale of of Noncash expenses to Cash
20x4 Noncash Assets Assets Sold paid Creditors withheld
January . . . . . . . . . . . P 72,000 P 90,000 P 1,200 P 66,000 P4,800
February . . . . . . . . . . 21,600 30,000 1,320 18,000 1,800
March . . . . . . . . . . . . 19,200 24,000 1,440 1,200
April . . . . . . . . . . . . . . 6,000 19,800 4,800 600
May . . . . . . . . . . . . . 2,400 18,000 960

Distributions of cash to partners are normally done at month-end.

Determine:
1. The amount to be received by Partner A for the month of January?
2. The amount to be received by Partner B for the month of February?
3. The amount to be received by Partner C for the month of March?
4. The amount to be received by Partner D for the month of April?
5. The total payment to partners for the month of May?
6. The partner most vulnerable to partnership losses on liquidation is:
7. The second payment to any partner (s) under a program of priorities shall be made thus:

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

XIV – Statement of Liquidation: Installment;

Aaron, Ben and Chris are partners who share income in a 1:3:1 ratio, respectively. On January 1, 20x5, they
decide to terminate operations. The partnership’s trial balance on that date is as follows:
Debit Credit
Cash P 20,000
Accounts receivable 200,000
Loan receivable – Ben 15,000
Inventory 400,000
Equipment 600,000
Accounts payable P 80,000
Bank loan payable 240,000
Loan payable – Aaron 25,000
Capital – Aaron 310,000
Capital – Ben 250,000
Capital – Chris _________ __330,000
P1,235,000 P1,235,000
Liquidation of assets will take place over the next few months. At the end of each month, available cash,
less an amount retained to cover estimated future liquidation costs, is distributed to each partner. During
January 20x5, the following events occur:
• P90,000 of the accounts receivable are collected.
• The inventory was sold for P180,000.
• The equipment was sold for P300,000.
• Liquidation costs of P10,000 were paid.
• The bank loan and the accounts payable were paid.
• P18,000 of cash is to be retained to cover future costs.
1. The capital balance (deficiency) of the partners on January 31 before the distribution of possible losses
and anticipated expenses (if any) for Aaron, Ben and Chris, respectively:
a. P203,400; (P159,800); P198,400 c. P229,000; (P159,800); P198,400
b. P225,400; (P 93,800); P220,400 d. P123,500; P 0; P242,000
2. How much should each partner receive for the month of February?
a. P203,400; (P159,800); P198,400 c. P229,000; (P159,800); P198,400
b. P225,400; (P 93,800); P220,400 d. P123,500; P 0; P118,500
XV
The balance sheet of the Partnership Duro, Kemp, and Ruth on December 31, 2021 before liquidation shows
the following:
Cash……………………………...P 60,000 Accounts payable..……………………P 75,000
Other Assets…………………… 280,000 Notes payable…………………………. 50,000
Loan to Ruth…………………… 10,000 Loan from Kemp…..…………………… 5,000
Duro, capital (50%)……………………. 85,000
Kemp, capital (30%)………………….. 85,000
_________ Ruth, capital (20%)……………………. 50,000
Total………………………………P 350,000 Total..……………………………………. P350,000
The partnership decided to liquidate as soon as possible after December 31, 2021, and all cash on hand
except for P5,000 contingency balance is to be distributed at the end of each month until the liquidation
is completed. If in the first month realization and distribution, the partnership pays liquidation expenses of
P2,500 and Kemp receives P30,000. Compute the cash proceeds from the initial sale of other assets?
a. P80,000 c. P100,000
b. P90,000 d. P102,500
XVI
The ABC Partnership is being dissolved. All liabilities have being liquidated. The balance of assets of hand is
being realized gradually. The following are details of partners’ accounts.
Capital Account Current Account Loans to
(Original Investment) (undistributed earnings) Partnership P&L
A P 5,000 P 250 Cr. P 3,750 40%
B 6,250 500 Dr. - 40%
C 2,500 250 Cr. 1,250 20%
If A receives P4,000 at this point, how much will BB and CC receive?
BB CC BB CC
a. P5,750 P4,000 c. P 5,000 P 1,500
b. 750 1,500 d. 1,000 1,125

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

XVII

A balance sheet for the partnership of Tree, Nee, and Dad who share profits in the ratio of 2:1:1, shows the
following balances just before the liquidation:
Cash………………………………………………. P 6,000
Other assets……………………………………... 29,750
Liabilities………………………………………….. 10,000
Tree, Capital…………………………………….. 11,000
Nee, Capital…………………………………….. 7,750
Dad, Capital……………………………………. 7,000
On the first installment of the liquidation, certain assets are sold for P16,000. Liquidation expenses of P500
are paid, and additional liquidation expenses are anticipated. Liabilities are paid amount to P2,700, and
sufficient cash is retained to insure the payment to creditors before making payment to partners. On the
first payment to partners, Tree receives P3,125.
1. The total cash payment to partners in the first installment amounted to:
a. P12,500 c. P6,250
b. P10,000 d. P5,000
2. The amount of cash withheld for anticipated liquidation expenses and unpaid liabilities amounted to:
a. P1,000 c. P8,300
b. P7,300 d. P8,800
XVIII

The partnership of Aiko, Barney and Clinton is winding its affairs. The following information has been
gathered. The trial balance of the partnership at June 30, 2019, is as follows:
Cash……………………………………… P 3,000 Accounts payable…………………P 8,500
Accounts receivable……………….. 11,000 Aiko, capital (50%)……………….. 33,500
Inventory………………………………. 7,000 Barney, capital (30%)……………. 22,500
Property, plant and Clinton, capital (20%)……………. 15,750
equipment (net)…………………….. 49,500
Aiko, loan……………………………… 6,000
Clinton, loan…………………………. 3,750 ______
Totals………………………………….. P 80,250 Totals…………………………………P 80,250

Cash is distributed to the partners at the end of each month. A summary of transactions follows:
July:
P8,250 – collected on accounts receivable; balance is uncollectible
P5,000 – received from the entire inventory
P 500 – liquidation expenses paid
P4,000 – cash retained in the business at the end of the month

August:
P 750 – liquidation expenses paid
- Clinton’s capital was reduced when Clinton accepted a piece of special equipment that had
a book value of P2,000. The partners agreed that a value of P5,000 should be placed on the
machine for liquidation purposes
P 1,250 - cash retained in the business at the end of the month

September:
P37,500 - received on sale of remaining plant assets
P 500 - liquidation expenses paid
- No cash was retained in the business

Determine the cash to be paid to Barney in:

July August September July August September
a. P -0-; P 2,000; P12,300 c. P 3,250; P 2,469; P11,700
b. P 3,250; P 2,000; P11,700 d. P 3,250; P 2,000; P13,200

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

XIX – Cash Priority Program

A cash distribution plan/payment priority program for MM, NN, and OO partnership appears below:
Priority Creditors MM NN OO
First P150,000 100%
Next P40,000 70% 30%
Next P35,000 3/7 4/7
Remainder 22% 34% 44%
If P275,000 is to be distributed, how much will be received by the priority creditors MM, NN and OO?

Priority Creditors MM NN OO
a. P 0 P 0 P 0 P 0
b. 0 60,500 93,500 121,000
c. 150,000 27,500 42,500 55,000
d. 150,000 54,000 29,000 42,000
XXI – With solution

The partnership of Urich, Volks, and Wales was liquidated. The partners have shared profits and losses in the
ratio of 3:4:3. Prior to liquidation, the capital balances were the following:
Urich…………………………….. P(30,000)
Volks…………………………….. 60,000
Wales…………………………… ( 5,000)
Cash and other assets totaled P100,000 with liabilities amounting to P75,000. Liquidation left the partnership
with P60,000, not enough to pay liabilities. Each partner can contribute P10,000 (but not more) from
personal assets. Determine how much cash Urich receives or pays-in (invest) as a result of the liquidation.
Receives (collects) Pays-in (Invest) Receives (collects) Pays-in (Invest)
a. P -0- P10,000 c. P 5,000 P -0-
b. -0- 42,000 d. 12,000 30,000
Answer – a
Urich Volks Wales Total
Balances before liquidation ( 30,000) 60,000 ( 5,000) 25,000
Loss on liquidation (P60,000 – P100,000) ( 12,000) ( 16,000) ( 12,000) ( 40,000)
Balances ( 42,000) 44,000 (17,000) ( 15,000)
Additional Investment 10,000 _______ 10,000 20,000
Balances ( 32,000) 44,000 ( 7,000) 5,000
Additional loss (P64,000 + P14,000) 32,000 ( 39,000) 7,000 -0-
Cash received ____-0- 5,000 5,000

XXII – With Solution

Gardo and Gordo formed a partnership on July 1, 2019 to operate two stores to be managed by each of
them. They invested P15,000 and P10,000 and agreed to share earnings 60% and 40%,respectively. All their
transactions were for cash, and all their subsequent transactions were handled through their respective
bank accounts as summarized below:
Gardo Gordo
Cash receipts…………………………………………………… P39,550.00 P32,622.50
Cash disbursements…………………………………………… 31,137.50 35,347.50
On October 31, 2019 all remaining non-cash assets in the two stores were sold for cash of P30,000. The
partnership was dissolved, and cash settlement was effected. In the distribution of the P30,000 cash, Gardo
received:
a. P12,000 c. P17,000
b. P13,000 d. P18,000
Answer - b Gardo (60%) Gordo (40%) Total
Initial Investments…………………………………………….... P15,000.00 P10,000.00 P 25,000.00
Investments (personal disbursement*)…………………….. 31,137.50 35,347.50 66,485.00
Withdrawals (Personal receipts)…………………………..... 39,550.00) ( 32,622.50) ( 72,172.50)
Balance before liquidation ……………………………….....P 6,587.50 P 12,725.00 P 19,312.50
Gain on realization (P30,000-P1,312.50)…………………. .. 6,587.50 4,275.00 687.50
Balances before payment to partners…………………..... P 13,000.00 P17,000.00 P 30,000.00
Payment to partner …………………………………………...( 13,000.00) ( 17,000.00) ( 30,000.00

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

Solution to Problem XI – Statement of Liquidation: Lump-sum

Note: Loss on Realization Creates a Deficit Balance in Partner’s Capital Account Requiring Transfer Partner’s
Loan Account (Right of Offset Is Exercised) since Partners Q and R are Personally Solvent.
QRS Partnership
Statement of Realization and Liquidation
November 1 – 30, 20x4
Non- Q, R, S,
Cash capital Capital Capital
Cash Assets Liabilities Q, Loan (30%) (50%) (20%)
Balances before liquidation 24,000 84,000 12,000 2,400 9,600 48,000 36,000
Payment of liquidation
expenses (14,400) ______ ________ ________ (4,320) (7,200) (2,880)
Balances after payment of
liquidation expenses 9,600 84,000 12,000 2,400 5,280 40,800 33,120
Write-off goodwill and
prepaid expenses _______ (72,000) _______ ________ (21,600) (36,000) (14,400)
Balances after write-offs 9,600 12,000 12,000 2,400 (16,320) 4,800 18,720
Realization and distribution
of loss 1,200 (12,000) _______ ________ ( 3,240) ( 5,400) ( 2,160)
Balances after realization 10,800 12,000 2,400 ( 19,560) ( 600) 16,560
Payment of liabilities (10,800) (10,800) ________ _______ ________ _______
Balances after payment of
Liabilities -0- 1,200 2,400 (19,560) ( 600) 16,560
Offset loan versus deficit ______ _______ (2,400) 2,400 _______ _______
Balances after offsetting -0- 1,200 (17,160) ( 600) 16,560
Additional investment by Q
and R 17,760 _______ 17,160 600 ______
Balances after additional
Investment 17,760 1,200 16,560
Payment of liabilities (1,200) (1,200) _______
Balances after payment of
Liabilities 16,560 16,560
Payment to partners -
Capital (16,560) (16,560)

Solution to Problem XIII – Statement of Liquidation: Installment

1. The amount to be received by Partner A for the month of January? None
2. The amount to be received by Partner B for the month of February? P5,280
3. The amount to be received by Partner C for the month of March? P5,568
4. The amount to be received by Partner D for the month of April? P360
5. The total payment to partners for the month of May? P2,040
6. The partner most vulnerable to partnership losses on liquidation is: Partner A
7. The second payment to any partner (s) under a program of priorities shall be made thus: B, P1,200 and C,
P1,200.

Solution Guide:
A, B, C and D Partnership
Statement of Liquidation
January 1, 20x4 to May 31, 20x4
Non- A, B, C, D,
Cash A, capital capital capital capital
Cash Assets Liabilities loan D, loan (40%) (20%) (20%) (20%)
Balances before
Liquidation 181,800 84,000 6,000 3,000 26,400 25,800 20,400 16,200
January
- Realization 72,000 (90,000) (7,200) (3,600) (3,600) (3,600)
- Payment of
expenses (1,200) ( 480) ( 240) ( 240) ( 240)
- Payment
of liabilities (66,000) ______ (66,000) _____ _____ ______ ______ ______ ______
Balances after Jan 4,800 91,800 18,000 6,000 3,000 18,720 21,960 16,560 12,360
February
- Realization 21,600 (30,000) (3,360) (1,680) (1,680) (1,680)
- Payment of
expenses (1,320) ( 528) ( 264)
- Payment ( 264) ( 264)
of liabilities (18,000) _______ (18,000) ______ ______ ______ _______ ______ ______
Balances before
payment to
partners 7,080 61,800 6,000 3,000 14,832 20,016 14,616 10,416
Payment to
Partners (Sch. 1) ( 5,280) ______ ______ _____ ______ (5,280) ______ _____
Balances after
February 1,800 61,800 6,000 3,000 14,832 14,736 14,616 10,416
Balances after
February 1,800 61,800 6,000 3,000 14,832 14,736 14,616 10,416

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

March
- Realization 19,200 (24,000) (1,920) ( 960) ( 960) ( 960)
- Payment of
expenses ( 1,440) ______ ______ _____ ( 576) ( 288) ( 288) ( 288)
Balances before
payment to
partners 19,560 31,500 6,000 3,000 12,336 13,488 13,368 9,168
Payment to
Partners (Sch. 2) (18,360) ______ (2,736) (3,000) (5,688) (5,568) (1,368)
Balances after
March 1,200 37,800 3,264 12,336 7,800 7,800 7,800
April
- Realization 6,000 (19,800) (5,520) (2, 760) (2,760) (2,760)
- Payment of
expenses (4,800) ______ (1,920) ( 960) ( 960) ( 960)
Balances before
payment to
partners 2,000 15,000 3,264 4,896 4,080 4,080 4,080
Payment to
Partners (Note 1) (1,500) ______ ( 720) ( 360) ( 360) ( 360)
Balances after
April 500 18,000 2,554 4,896 3,720 3,720 3,720
May
- Realization 2,400 (18,000) (6,240) (3,120) (3,120) (3,120)
- Payment of
expenses ( 960) _____ ( 384) ( 192) ( 192) ( 192)
Balances before
Offsetting 1,440 2,554 ( 1,728) 408 408 408
Offset deficit vs.
Loan ______ (1,728) 1,728 _____ ______ _____
Balances before
payment 2,040 816 408 408 408
Payment to
Partners (Note 2) (2,040) (816) (408) (408) (408)

A, B, C and D Partnership
Schedule of Safe Payments
Schedule 1 – February 28, 20x4
Computation of Distribution of Cash on February 28, 20x4
A, capital B, capital C, capital D, capital
(40%) (20%) (20%) (20%)
Balances before payment to partners:
Loans 6,000 3,000
Capital 14,832 20,016 14,616 10,416
Total Interest 20,832 20,016 14,616 13,416
Restricted interest for possible losses:
Unrealized non-cash assets P 61,800
Cash withheld 1,800
P 63,600 (25,440) (12,720) (12,720) (12,720)
( 4,608) 7,296 1,896 696
Restricted for possible insolvency of A (2:2:2) 4,608 (1,536) (1,536) (1,536)
5,760 360 ( 840)
Restricted for possible insolvency of D (2:2) ( 420) ( 420) 840
5,340 ( 60)
Restricted for possible insolvency of C ( 60) 60
Payment to partner (s) 5,280
Applied to:
Loans -0-
Capital 5,280
5,280

Schedule 2 – March 31, 20x4

Computation of Distribution of Cash on March 31, 20x4
A, capital B, capital C, capital D, capital
Balances before payment to partners: (40%) (20%) (20%) (20%)
Loans 6,000 3,000
Capital 12,336 13,488 13,488 9,168
Total Interest 18,336 13,488 13,488 12,168
Restricted interest for possible losses:
Unrealized non-cash assets P 37,800
Cash withheld 1,200
P 39,000 (15,600) ( 7,800) ( 7,800) ( 7,800)
2,736 5,688 5,568 4,368
Applied to:
Loans 2,736 -0- -0- 3,000
Capital ___-0- 5,688 5,568 1,368
2,736 5,688 5,568 4,368

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
Weeks 2 & 3: PARTNERSHIP DISSOLUTION & LIQUIDATION

A, B, C and D Partnership
Cash Payment Priority Program/ Schedule of Cash Distribution Plan / Pre-distribution Plan
January 31, 20x4
Interests Payments
A, B, C, D, A, B, C, D,
capital capital capital capital capital capital capital capital
(40%) (20%) (20%) (20%) (40%) (20%) (20%) (20%) Total
Balances before
liquidation:
Loans 6,000 3,000
Capital 26,400 25,800 20,400 16,200
Total Interests 32,400 25,800 20,400 19,200
Divided by: P & L % __40% ___20% __20% __20%
Loss Absorption
Abilities, LAA 81,000 129,000 102,000 96,000
Priority I ______ (27,000) _______ _______ 5,400 5,400
81,000 102,000 102,000 96,000
Priority II ______ ( 6,000) ( 6,000) _______ 1,200 1,200 2,400
81,000 96,000 96,000 96,000
Priority III ______ (15,000) (15,000) (15,000) _______ 3,000 3,000 3,000 9,000
81,000 81,000 81,000 81,000 ____-0- 9,600 4,200 3,000 16,800
Vulnerability Rankings: 1st (Most Vulnerable) – Partner A (first to suffer loss)
2nd – Partner D
3rd – Partner C
4th (Least Vulnerable) – Partner B

A, capital B, capital C, capital D, capital

(40%) (20%) (20%) (20%)
Total Interests P 32,400 P 25,800 P 20,400 P 19,200
Divided by: P & L % ____40% ____20% ____20% ____20%
LAA, Loss Absorption Abilities /
MLA, Maximum Loss Absorbable P 81,000 P129,000 P 102,000 P 96,000
Order of Cash Distribution (4) (1) (2) (3)
Vulnerability Rankings
(1is most vulnerable) (1) (4) (3) (2)

The vulnerability ranks indicate that partner A is most vulnerable to losses because his equity were reduced
to zero with a partnership liquidation loss of P81,000. Partner B is least vulnerable because his equity is
sufficient to absorb his share of liquidation losses up to P129,000.

This interpretation helps explain why partner B received all the cash distributed to partner on the first
installment distribution (August 20x4).
Incidentally, the cash priority program developed will yield the same cash payment as the process of
computing safe payments each time cash is available.

The cash distribution under the cash priority program is as follows:

Order of Cash Distribution Creditors A B C D

1. First P70,000 100%
2. Next P 4,500 100%
3. Next P2,000 50% 50%
4. Next P7,500 33 1/3% 33 1/3% 33 1/3%
5. Remainder 40% 20% 20% 20%

The first P84,000 available is, of course paid to the creditors. Cash may be held back from distribution if it is
anticipated that additional expenses will be incurred and unrecorded liabilities will be discovered.

The distribution of cash in excess of the reserve amount proceeds as determined. Partner B will receive all
of an additional ash up to P5,400.

Additional cash in excess of P5,400 and up to P7,800 is distributed 50:50 to partners B and C. Any amount
in excess of P7,800 up to P16,800 is distributed 1: 1: 1 to partners B, C, and D, respectively. After P16,800
(P5,400 + P2,400 + P9,000) has been distributed to the partners, the capital accounts are in the desired profit
and loss ratio of 4:2:2:2. Any further distributions to the partners are made in accordance with the profit and
loss ratio.

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY AFAR-02
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Even though both methods produce the same results, the cash payment priority program is more
informative to both personal and partnership creditors, and to the partners. Interested parties now know
the order in which the individual partners will receive cash and the amounts that each may receive at
each period of the distribution process.

One requirement that must be satisfied in the development of the advance plan is that the partners must
share income in the same ratio that they share losses.

If this were not the case the potential amount of a new loss would need to be computed after every
allocation to the partners’ capital accounts.

This occurs because the allocation of liquidation gain alters the order of cash distribution computed in the
priority program.

Solution to Problem XIV – Statement of Liquidation: Installment

1. a -
Aaron Ben Chris
(20%) (60%) (20%) Total
Capital P310,000 P250,000 P330,000 P890,000
Loans 25,000 _(15,000) _______ 10,000
Combined capital/Total Interest P335,000 P235,000 P330,000 P 900,000
Loss on inventory sale (44,000) (132,000) (44,000) (220,000)
Loss on equipment sale (60,000) (180,000) (60,000) (300,000)
Liquidation costs _(__2,000) ( 6,000) __(2,000) _( 10,000)
January 31 capital P229,000 P( 83,000) P224,000 P370,000
Less:
Cash withheld ( 3,600) (10,800) (3,600) (18,000)
Potential loss on receivables ( 22,000) (66,000) __(22,000) (110,000)
Balance P203,400 P(159,800) P198,400 P242,000
Distribute deficiency ( 79,900) 159,800 (79,900) --
Safe payments P123,500 P 0 P118,500 P242,000
2. d - refer to No. 1 for computation

- END -

**Develop an attitude of gratitude, and give thanks for everything that happens to you,
knowing that every step forward is a step toward achieving something bigger and better
than your current situation.**
**The remarkable thing we have is a choice every day regarding the attitude we will
embrace for that day. We cannot change our past... We cannot change the fact that
people will act in a certain way. We cannot change the inevitable. The only thing we can
do is play on the one string we have, and that is our attitude.**
**Attitude is more important than the past, than education, than money, than
circumstances, than what people do or say. It is more important than appearance,
giftedness, or skill.**
***Patience is bitter but its fruit is sweet.***
***We rarely think about the other fellow, until we become the other fellow***
***The true perfection of man lies not in what man has,
but in what man is***
***A person who sows seeds of kindness enjoys a perpetual harvest***
**Great achievements are not done by strength but by perseverance**
**GOD’S LOVE is like a river that keeps on flowing…**

GOD BLESS AS ALWAYS!!!

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