Gideon and Joshua were partners with capital account balances of P260,000 and $240,000, respectively, and shared profits and losses in the ratio of 6:4, respectively. The partners decided to admit Levi as a new partner with a 20% equity interest for an investment in the partnership of P150,000. Prior to admission, Gideon and Joshua would revalue the partnership's assets. If the net increase in the partnership assets was P185,000, what would be the balance of Gideon's capital account after revaluation but before the admission of Levi?

Gideon and Joshua were partners with capital account balances of P260,000 and $240,000, respectively, and shared profits and losses in the ratio of 6:4, respectively. The partners decided to admit Levi as a new partner with a 20% equity interest for an investment in the partnership of P150,000. Prior to admission, Gideon and Joshua would revalue the partnership's assets. If the net increase in the partnership assets was P185,000, what would be the balance of Gideon's capital account after revaluation but before the admission of Levi?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Jeon, Kim, and Min are partners with present capital balances of P500,000, P600,000, and P200,000, respectively. The partners share profit and losses according to the following percentages: 60% for Jeon, 20% for Kim, and 20% for Min. Park is to join the partnership upon contributing P600,000 to the partnership in exchange for a 25% interest in capital and a 20% interest in profits and losses. The existing assets of the original partnership are undervalued by P220,000. The original partners will share the balance of profits and losses in proportion to their original percentages. Using the total/full goodwill method, answer the following (answers can be repeated): a. The revaluation of assets will increase/decrease the assets by: b. The total contributed capital is c. The total agreed capital is d. Asset (Goodwill) will be debited/credited by e. After the admission of Park, the total capital of Jeon is f. After the admission of Park, the total capital of Kim is g. After the…
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?
VINCENT and VAN are partners with capital account balances of P120,000 and P180,000, respectively They divide the profits based on their capital balances. The partnership agreed to admit GO as a partner with a 1/3 interest in capital and profits, after an agreed revaluation of the partnership's assets, for his investment of P200,000. The capital balance of VINCENT after revaluation of assets and admission of GO is
Siham and Dalia are partners with capital balances of $60,000 and $40,000, respectively. Profits and losses are divided in the ratio of 60:40. Siham and Dalia decided to form a new partnership with Jamileh, who invested land valued at $40,000 for a 20 percent capital interest in the new partnership. Jamileh's cost of the land was $35,000. The partnership elected to use the bonus method to record Jamileh's admission into the partnership. Jamileh's capital account should be credited for a. $40,000. b. $28,000. c. $35,000. d. $27,000.
BRAIN and FREEZE have capital balances of P750,00 and P500,000 and share in partnership profits and losses in the ratio of 3:2 each respectively. On November 30, 20x10, the partners admitted HURTS into the partnership by investing P200,000 cash and a machine to be used by the partnership for a 20% interest. After HURT's admission, BRAIN's capital increased by 10%. What is the fair value of the machine invested by HURT in the partnership?
Shirley contributes property to a new partnership with a value of $1,000,000 and a basis of $400,000 that is secured by a $500,000 nonrecourse note. Under the terms of the partnership agreement, Shirley will be allocated 25% of all profits. The partnership agreement also states that "excess nonrecourse liabilities" will be allocated to partners according to profit ratios. How much of the nonrecourse liability will be allocated to Shirley? please dont provide answer in images thank you
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…
Kern and Pate are partners with capital balances of $60,000 and $20,000, respectively. Profits and losses are divided in the ratio of 60:40. Kern and Pate decided to form a new partnership with Grant, who invested land valued at $15,000 for a 20% capital interest in the new partnership. Grant's cost of the land was $12,000. The partnership elected to use the bonus method to record the admission of Grant into the partnership. Grant's capital account should be credited for: A. $12,000 B. $15,000 C. $16,000 OD. $19,000
Queso and Royal formed a partnership and named it Queso Royal. Queso, formerly a sole proprietor has assets with book value of P 300,000 and liabilities with book value of P 70,000. The partnership decided to carry the assets of Queso at 110% of its book value and that Queso should also recognize additional liabilities of P 10,000. Queso’s adjusted net assets are equivalent to 2/3 of the partnership’s net assets. How much is the capital balance of Royal immediately upon formation? Group of answer choices P 125,000 P 75,000 P 100,000 P 150,000
Katy and Perry who share profits and losses in the ratio of 3:7 are partners with capital balances of P40,000 and P60,000, respectively. Hermes is to be admitted into the partnership for 20% interest in the capital of the new partnership. If assets are revalued and the capital balances of Katy and Perry after recording the admission of Hermes are P52,000 and P88,000, respectively, how much will be the amount invested by Hermes?
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:
May and Jun are partners with profit and loss ratio of 55:45 and capital balances of ₱530,000 and ₱370,000, respectively. On June 9, 2022, Julie was admitted into the partnership by investment for a 40% of the total partnership capitalization. However, before the admission of Julie, the partners agreed that the asset “Equipment” should be revalued from ₱800,000 to ₱500,000. How much cash is to be invested by Julie?