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A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P200,000 with historical cost of P1,600,000 and accumulated depreciation of P1,200,000. B will contribute a land and building with book value of P2,400,000 and fair market value of P3,000,000. The land and building is subject to a mortgage payable amounting to P600,000 to be assumed by the partnership. The partners agreed that B will have 60% capital interest in the partnership. They agreed that C will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P 600,000.   (Show your solution) What is the total agreed capitalization of the ABC Partnership? a. P3,000,000 b. P4,000,000 c. P5,000,000 d. P6,000,000 What is the capital credit of A in the ABC Partnership after the formation? a. P200,000 b. P400,000 c. P600,000 d. P800,000 What is the capital credit of B in the ABC Partnership after the formation? a. P1,800,000 b. P3,000,000 c. P2,800,000 d. P2,400,000 What is the cash to be contributed by C in the ABC Partnership? a. P1,000,000 b. P1,200,000 c. P1,400,000 d. P1,6 00,000

A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P200,000 with historical cost of P1,600,000 and accumulated depreciation of P1,200,000. B will contribute a land and building with book value of P2,400,000 and fair market value of P3,000,000. The land and building is subject to a mortgage payable amounting to P600,000 to be assumed by the partnership. The partners agreed that B will have 60% capital interest in the partnership. They agreed that C will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P 600,000.   (Show your solution) What is the total agreed capitalization of the ABC Partnership? a. P3,000,000 b. P4,000,000 c. P5,000,000 d. P6,000,000 What is the capital credit of A in the ABC Partnership after the formation? a. P200,000 b. P400,000 c. P600,000 d. P800,000 What is the capital credit of B in the ABC Partnership after the formation? a. P1,800,000 b. P3,000,000 c. P2,800,000 d. P2,400,000 What is the cash to be contributed by C in the ABC Partnership? a. P1,000,000 b. P1,200,000 c. P1,400,000 d. P1,6 00,000

FINANCIAL ACCOUNTING
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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A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P200,000 with historical cost of P1,600,000 and accumulated depreciation of P1,200,000.

B will contribute a land and building with book value of P2,400,000 and fair market value of P3,000,000. The land and building is subject to a mortgage payable amounting to P600,000 to be assumed by the partnership.

The partners agreed that B will have 60% capital interest in the partnership. They agreed that C will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P 600,000.

 

(Show your solution)

  1. What is the total agreed capitalization of the ABC Partnership?
    a. P3,000,000
    b. P4,000,000
    c. P5,000,000
    d. P6,000,000
  2. What is the capital credit of A in the ABC Partnership after the formation?
    a. P200,000
    b. P400,000
    c. P600,000
    d. P800,000
  3. What is the capital credit of B in the ABC Partnership after the formation?
    a. P1,800,000
    b. P3,000,000
    c. P2,800,000
    d. P2,400,000
  4. What is the cash to be contributed by C in the ABC Partnership?
    a. P1,000,000
    b. P1,200,000
    c. P1,400,000
    d. P1,6 00,000
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