Financial Accounting and ReportingTopic: Partnership Dissolution – Change in Ownership Part I. Partnership Dissolution - Change in Ownership1. ABC Partnership has the following equity balanees and profit and loss distribution:Capital BalanceP 252,000PartnersProfit DistributionAnthonyBenjaminCharlie60%126,00042,00030%10%The partners decide to sell to Daniel 20% of their respective capital and profit and loss interestfor a total payment of P90,000. Daniel will pay the money directly to other partners.Required:a. If goodwill is to be established, how much capital balances will be recorded for each partnerafter admissi on? How much cash will the original partners receive?b. Ifbonus method is to be used, what are the capital balances of the partners after the admi ssionto the partnership? How much cash will the original partners receive?

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Answered: 1. ABC Partnership has the following…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Financial Accounting and Reporting

Topic: Partnership Dissolution – Change in Ownership

Part I. Partnership Dissolution - Change in Ownership
1. ABC Partnership has the following equity balanees and profit and loss distribution:
Capital Balance
P 252,000
Partners
Profit Distribution
Anthony
Benjamin
Charlie
60%
126,000
42,000
30%
10%
The partners decide to sell to Daniel 20% of their respective capital and profit and loss interest
for a total payment of P90,000. Daniel will pay the money directly to other partners.
Required:
a. If goodwill is to be established, how much capital balances will be recorded for each partner
after admissi on? How much cash will the original partners receive?
b. Ifbonus method is to be used, what are the capital balances of the partners after the admi ssion
to the partnership? How much cash will the original partners receive?

Process of recording, summarizing, and analyzing financial information to prepare financial statements, and making them available to stakeholders, thereby enabling them to make an informed decision about the company. Financial reporting is an extension of financial accounting that deals with the presentation of financial information in accordance with the requirements of prescribed accounting standards.

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