15. The PQR Partnership is being dissolved. All liabilities have been paid and the remainingassets are being realized gradually. The equity of the partners is as follows:Loans to (from)PartnershipP6,000Profit andPartners' AccountsP24,000P36,000P60,000The first cash payment to any Partner(s) under a program of priorities shall be madeLoss Ratio34R(P10,000)thus:A. To R P2,000B. To Q P6,000 &R P8,000C. To P, Q and R based on their profit and loss sharing ratioD. All of the above

A partnership is a business arrangement between two or more people who own an entity and share its…

15. The PQR Partnership is being dissolved. All liabilities have been paid and the remaining assets are being realized gradually. The equity of the partners is as follows: Loans to (from) Partnership P6,000 Profit and Loss Ratio 3 Partners' Accounts P24,000 P36,000 P60,000 The first cash payment to any Partner(s) under a program of priorities shall be made P Q 3 4 R (P10,000) thus: A. To R P2,000 B. To Q P6,000 & R P8,000 C. To P, Q and R based on their profit and loss sharing ratio D. All of the above

15. The PQR Partnership is being dissolved. All liabilities have been paid and the remaining assets are being realized gradually. The equity of the partners is as follows: Loans to (from) Partnership P6,000 Profit and Loss Ratio 3 Partners' Accounts P24,000 P36,000 P60,000 The first cash payment to any Partner(s) under a program of priorities shall be made P Q 3 4 R (P10,000) thus: A. To R P2,000 B. To Q P6,000 & R P8,000 C. To P, Q and R based on their profit and loss sharing ratio D. All of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PB1. LO 15.3 The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partner's capital account.
12. Presented below is the condensed balance sheet of the partnership of A, B, and C who share profits and losses in the ratio of 2:3:5. respectively: Cash 100,000 Liabilities 50,000 Other assets 350,000 A, Capital 110,000 B, Capital 120,000 C, Capital 170,000 Total 450,000 Total 450,000 The partners agree to sell to D 10% of their respective capital and profit and loss interests for a total payment of P50,000. The payment by D is to be made directly to the individual partners using the book value approach. Determine the capital balance of B after admission of the new partner.
Watts and Lyon are forming a partnership. Watts invests $40,500 and Lyon invests $49,500. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 11% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $13,000 net loss; Year 2, $32,500 net income; and Year 3, $54,167 net income. Required: Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of…
2.
In a partnership ABC, engaged in the flowershop business, the liabilities of the partners are as follows: A – P20, 0000 B – P50, 000 C – P30, 000.i. Can B engage in the same business? Why or why not? ii. How shall any profit and loss be divided among the partners? iii. Suppose D is an industrial partner. What shall be his share?
3. A and B agreed to form a partnership. A contributed P40,000 cash while B contributed equipment with fair value of P100,000. However due to the expertise that A will be bringing to the partnership, the partners agreed that they should initially have an equal interest in the partnership capital. Requirement: Provide the journal entry to record the initial investments of the partners. Option 1 Clear selection
1. On January 1, 20X2, partners A, B and C, who share profits and losses in the ratio of 5:3:2, respectively, decided to liquidate their partnership. The partnership trial balance at this date is as follows: Credit Cash Accounts Receivable Inventory Machinery and Equipment, net A, Loan ● Accounts Payable B, Loan A, Capital B, Capital C, Capital Totals Debit 18,000 66,000 52,000 189,000 30,000 53,000 20,000 118,000 90,000 74,000 355,000 355,000 The partners plan a program of piecemeal conversion of assets in order to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. The following liquidation transactions occurred in January 20X2. P51,000 was collected on accounts receivable; the balance in uncollectible. ● $48,000 was received for the entire inventory. $2,000 liquidation expenses were paid. P50,000 was paid to outside creditors, after offset of a P3,000 credit memorandum…
PARTNERSHIP Kindly provide a clear solution. Thank you!
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EXERCISE 6-12. Problem Solving 3. Alger is trying to decide whether to accept a salary allowance of P80,000 or a salary allowance of P50,000 plus a bonus of 10% of net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P200,000. You are required to determine the amount of partnership net income that would be necessary so that Alger would be indifferent between the two.
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