7. On December 31, 2019, Lilo, Stitch, and Tom were partners with capital account balances of P95,000, P80,000, and P60,000, respectively, and shared rofits and losses in the ratio 5:3:2, respectively. The partners decided to admit Jerry as a new partner by contributing cash of P80,000 to the partnership and by paying P10,000 for 15% of Stitch's share. Jerry would have a 20% share in the profit and loss ratio. After the admission, the partnership would have a total capital balance of P330,000 and Jerry's, Capital account balance of P70,000. If such was the case, the capital balance of Stitch immediately after the admission of Jerry should be

7. On December 31, 2019, Lilo, Stitch, and Tom were partners with capital account balances of P95,000, P80,000, and P60,000, respectively, and shared rofits and losses in the ratio 5:3:2, respectively. The partners decided to admit Jerry as a new partner by contributing cash of P80,000 to the partnership and by paying P10,000 for 15% of Stitch's share. Jerry would have a 20% share in the profit and loss ratio. After the admission, the partnership would have a total capital balance of P330,000 and Jerry's, Capital account balance of P70,000. If such was the case, the capital balance of Stitch immediately after the admission of Jerry should be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The Morrel & Knoz partnership has the following balances on June 30, 2024: E (Click the icon to view…

A: Noncash assets are assets that are not in cash. During liquidation of partnership business, first,…

Q: Amna and Jalal formed a partnership on January 2, 2019. Jalal invested $120,000 in cash. Amna…

Q: On 1 October 2020, Duane and Kevin, two Cryptocurrency advisory professionals, commenced a…

A: A partnership firm is a business structure in which two or more individuals or entities come…

Q: Floyd and Merriam start a partnership business on June 12, 2025. Their capital account balances as…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: ee are partners, sharing earnings in the ratio of 3:4:6: accounts on December 31, 2019 are as…

A: Given as, Bench- P 1,000 Mark- P 25,000 Spencer- P 25,000 Lee- P 9,000

Q: Sawsan and Ali invested $500,000 and $200,000 respectively in a partnership, and they share profits…

A: Partnership refers to an arrangement between two or more than two persons where they agree to carry…

Q: Cleary, Wasser, and Nolan formed a partnership on January 1, 2019, with investments of $100,000,…

A: Partnership is an agreement between two or more persons to engage in same business. They agreed to…

Q: Farrell and Jimmy enter into a partnership agreement on May 1, 2018. Farrell contributes $30,000 and…

A: Lets understand the basics. Partnership is an agreement between two or more person who work together…

Q: Laurel and Hardy form a 50/50 partnership (HaHa Partners) in 2018. Laurel contributes land with a…

A: Partnership is an agreement in which two or more parties agrees to share profits and losses as per…

Q: At the beginning of the current year, David and Garrett formed the DG Partnership by transferring…

A: No gain or loss is recognized by either the partner of the partnership when a property is…

Question

Design Layout
nt
▼
A A
X² A at A
Aa
✓
References
IN
Mailings
13
V
Review
V
Paragraph
View
21
Help
IS
Tell me what you want to do
AaBbCcDd AaBbCcDd AaBbCc
1 Normal
1 No Spac... Heading 1
Styles
7. On December 31, 2019, Lilo, Stitch, and Tom were partners with capital account balances of
P95,000, P80,000, and P60,000, respectively, and shared rofits and losses in the ratio 5:3:2,
respectively. The partners decided to admit Jerry as a new partner by contributing cash of
P80,000 to the partnership and by paying P10,000 for 15% of Stitch's share. Jerry would have
a 20% share in the profit and loss ratio. After the admission, the partnership would have a
total capital balance of P330,000 and Jerry's, Capital account balance of P70,000. If such was
the case, the capital balance of Stitch immediately after the admission of Jerry should be

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Ann, Beth, Chris and Dan are equal partners in the ABCD. They have agreed that all items of partnership income, gain, loss and deduction will be split equally between them. In addition, since Ann is expected to be rendering the majority of the services on behalf of the partnership, the partners have agreed that she will receive $3,000 per month in addition to her 25% distributive share. For the year 2020, the partnership had short-term capital loss of $28,000, long-term capital gain of $54,000 and bottom line ordinary income (before considering the additional payments to Ann) of $21,000. What is the amount and character of partnership income and loss that Ann, Beth, Chris and Dan must include from the ABCD partnership on their 2020 income tax returns?
Alma, Tina and Carla are partners. They divide profits and losses 30%, 40% and 30%, respectively. On June 30, 2019, they decided to liquidate their partnership because of continuous losses in operation. The following balances of selected accounts were taken from the books of the partnership on this date: Accounts Receivable - Tina Loans Payable - Carla Loans Payable - Alma Alma, Capital Tina, Capital Carla, Capital P24,000 9,600 28,800 118,800 88,800 78,000 On this date, the partnership's assets were P534,400 excluding the receivables from partners and cash of P28,000. The non-cash assets assets were sold at 70% of book value. After the realization, the partnership paid all outside creditors and liquidation expenses of P12,000 and distributed the remaining cash to the partners. 23. How much was cash was distributed to the partners? a. C. b. d. P98,400 P132,000 P178,400 P78,000 000,049 000 214
At the beginning of the current year, Cameron and Harold formed the CH Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, Cameron transferred property having a $55,000 FMV, a $28,000 adjusted basis, and subject to a $13,000 liability, which the partnership assumed. Harold contributed $60,000 cash to the partnership. The partnership also borrowed $26,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal economic risk of loss. During the current year, the partnership earned $27,000 of net ordinary income and reinvested this amount in new property. Read the requirements. Requirement a. What is the partnership's and each partner's gain or loss recognized on the formation of the partnership? (Complete all input fields. Enter a loss with a minus sign or parentheses. If no gain or loss is recognized by a partner or the partnership, enter…
I can’t seem to arrive to the correct answer can you help me make a solution to this? Thanks!
Jerry and Sherry own and operate a partnership. Jerry’s capital balance is $50,000 and Sherry’s is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/loss equally. Allison intends to contribute $40,000 cash to receive a twenty-five percent interest in the partnership Required: a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner share of the total equity d. Determine the bonus resulting from Allison’s equity of her contribution e. Make journal entries to record Allison’s admission to the partnership. Please solve sub-part e. Show Your Work:
Can you make a solution for these? The right answer for Rod and Sol is 420,000. Thanks!