EXERCISES 1. Ben and Bob are partners in a business selling sports wear and equipment which they capital organized in 2015. Profits are shared in the ratio of 1:1, respectively. Their c balances as of December 31, 2017 were P240,000 and P260,000, respectively. Drawing accounts are always closed yearly to the capital accounts. They agreed to admit Ted upon payment of P150,000 for a 50% interest from Bench on July 1, 2018. Before admission they agreed to update t eir capital accounts for the following: a) net income of P250,000 for the first half of 2018 b) monthly salary drawings of P10,000 and P20,000 were made by Ben and Bob. c) revalue equipments acquired at a cost of P200,000, book value of P180,000 and a fair market value equal to 75% of its book value. Direction: Prepare a table revising partners' equity for revaluation and equity transfer. a. Record profit share, asset revaluation and close to capital the drawings they made. b. Based on the updated capital accounts of the existing partners record the admission of Ted. c. Prepare the revised partners' equity just after admission. d. Determine the revised profit and loss ratio of the partners, assuming there was agreement made after the purchase was made. te ond losses in the ratio of 2:2:1 ond1

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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1. Ben and Bob are partners in a business selling sports wear and equipment which they organized in 2015. Profits are shared in the ratio of 1:1, respectively, Their capital balances as of December 31, 2017 were P240,000 and P260,000, respectively. Drawing accounts are always closed yearly to the capital accounts. They agreed to admit Ted upon payment of P150,000 for a 50% interest from Bench on July 1, 2018. Before admission they agreed to update their capital accounts for the following:

(see attached image for the given. please answer it based on your knowledge. thank you so much)

Direction: Prepare a table revising partners' equity for revalualion and equity transfer.

a. Record profit share, asset revaluation and close to capital the drawings they made.

b. Based on the updated capital accounts of the existing partners record the admission of Ted.

b. Prepare the revised partners' equity just after admission.

d. Determine the revised profit and loss ratio of the partners, assuming there was no agreement made after the purchase was made.

a. Record profit share, asset revaluation and close to capital the drawings they made.
Direction: Prepare a table revising partners' equity for revaluation and equity transfer.
b. Based on the updated capital accounts of the existing partners record the admission of
b) monthly salary drawings of P10,000 and P20,000 were made by Ben and Bob.
c) revalue equipments acquired at a cost of P200,000, book value of P180,000 and a
organized in 2015. Profits are shared in the ratio of 1:1, respectively. Their capital
Ben and Bob are partners in a business selling sports wear and equipment which they
payment of P150,000 for a 50% interest from Bench on July 1, 2018. Before admission
balances as of December 31, 2017 were P240,000 and P260,000, respectively. Drawing
accounts are always closed yearly to the capital accounts. They agreed to admit Ted upon
EXERCISES
organized in 2015. Profits are shared in the ratio of 1:1, respectively. Thei
a.
they agreed to update t eir capital accounts for the following:
a) net income of P250,000 for the first half of 2018
b) monthly salary drawings of P10,000 and P20,000 were made by Ben and p
fair market value equal to 75% of its book value.
Direction: Prepare a table revising partners' equity for revaluation and equity transc
Record profit share, asset revaluation and close to capital the drawings they ma
Based on the updated capital accounts of the existing partners record the admiss
Ted.
c. Prepare the revised partners' equity just after admission.
d. Determine the revised profit and loss ratio of the partners, assuming there was
agreement made after the purchase was made.
Gta ond losses in the ratio of 2:2:1 ond 1

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