Adidas, Evans and Merrelle are partners who share profit and loss in the ratio 30%, 25%, 25% and 20%. Capital balances before division of Net loss of P30,000 and withdrawals of P10,000 each, were as follows: 120,000.00 - Adidas 150,000.00 - Evans 130,000.00 - Merrelle 100,000.00- Converse 1. Converse is to retire from the partnership and will be paid P84,000 2. Converse is to retire and will be paid P100,000. Use the Bonus method 3. Converse is to retire and will be paid P70,000. Use the Revaluation of asset method 4. Converse is to retire and will be purchased by Merrelle paying P90,000 5. Converse is to retire from the partnership and will have an increase share of P10,000 in the revaluation of asset 6 Converse is to retire from the partnership and will be paid P90,000 Which method would Evans would prefer assuming the partners divide the P/L equally after the retirement of Converse?
Adidas, Evans and Merrelle are partners who share profit and loss in the ratio 30%, 25%, 25% and 20%. Capital balances before division of Net loss of P30,000 and withdrawals of P10,000 each, were as follows: 120,000.00 - Adidas 150,000.00 - Evans 130,000.00 - Merrelle 100,000.00- Converse 1. Converse is to retire from the partnership and will be paid P84,000 2. Converse is to retire and will be paid P100,000. Use the Bonus method 3. Converse is to retire and will be paid P70,000. Use the Revaluation of asset method 4. Converse is to retire and will be purchased by Merrelle paying P90,000 5. Converse is to retire from the partnership and will have an increase share of P10,000 in the revaluation of asset 6 Converse is to retire from the partnership and will be paid P90,000 Which method would Evans would prefer assuming the partners divide the P/L equally after the retirement of Converse?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Adidas, Evans and Merrelle are partners who share profit and loss in the ratio
30%, 25%, 25% and 20%. Capital balances before division of Net loss of
P30,000 and withdrawals of P10,000 each, were as follows:
120,000.00 - Adidas
150,000.00 - Evans
130,000.00 - Merrelle
100,000.00- Converse
1. Converse is to retire from the partnership and will be paid P84,000
2. Converse is to retire and will be paid P100,000. Use the Bonus method
3. Converse is to retire and will be paid P70,000. Use the Revaluation of asset method
4. Converse is to retire and will be purchased by Merrelle paying P90,000
5. Converse is to retire from the partnership and will have an increase share of P10,000 in the revaluation of asset
6 Converse is to retire from the partnership and will be paid P90,000
Which method would Evans would prefer assuming the partners divide the P/L equally after the retirement of Converse?
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