Amistoso is personally solvent, Galicia is personally insolvent, and Cruz becomes insolvent after investing the cash needed by the partnership.
The partnership of Cruz, Amistoso, and Galicia decided to liquidate their partnership on May 31, 2016. Before liquidating and sharing of net income, their capital balances are as
follows: Cruz (30%) P875,000, Amistoso (30%) P630,000, and Galicia (40%) P770,000. Net income from January 1 to May 31 is P420,000. The liabilities of the partnership amounted to P735,000 and its total assets include cash amounting to P245,000.
Unsettled liabilities are P385,000. Cruz invested additional cash enough to settle their partnership’s indebtedness. Amistoso is personally solvent, Galicia is personally insolvent,
and Cruz becomes insolvent after investing the cash needed by the partnership.
How much will Cruz receive as a result of their liquidation?
A. 315,000
B. 462,000
C. 385,000
D. 0
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