DEF partners, whose capital balances totaled P 400,000 decided to admitG who invested P120,000 cash for a 20% interest. The partners agree to revalue the assets.This will result toAsset revaluation for G of P 20,000Asset revaluation of P80,000 for D, E, and FO agreement is invalidAsset impairment of P20,000 for D, E, and F

Partnership is one of the form of business organisation, under which two or more than two persons…

Answered: DEF partners, whose capital balances…

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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During the year, the ABC partnership's operations generated a loss. The partnership agreement provides for the following P/L sharing provisions: Interest of P2,000, P3,000, and P5,000 to partners A, B, and C, respectively Salary of P15,000 to partner A Any remainder is allocated equally. freshma freshman freshma If the share of partner A in the loss is P8,000, how much is the net loss for the period?
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. What is the amount of cash contributed by C?
Entry of a new partner under the goodwill method.Pearsonand Murphy have partner capital balances, at book value, of $45,000 and $65,000 as of Decem-ber 31. Pearson is allocated 60% of profits or losses, and Murphy is allocated the balance. Thepartners believe that tangible net assets have a market value in excess of book value in theamount of $30,000 net. The $30,000 is allocated as follows:Book ValueMarket ValueAccounts receivable . . . . . . . . .$120,000$102,000Inventory . . . . . . . . . . . . . . . . . .200,000258,000Warranty obligations . . . . . . . .20,00030,000They are considering admitting Warner to the partnership in exchange for total considera-tion of $84,000 cash. In exchange for the consideration, Warner will receive a 30% interest incapital and a 35% interest in profits.1. Prepare the entries associated with the admission of Warner to the partnership under thegoodwill method.2. If the goodwill suggested by the admission of Warner proved to be…

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