Make-up assignment Partnership Dissolution Instruction: Prepare the answers and solutions in written form using a clean paper (e.g. Yellow pad, bond paper, notebook etc.) and submit a snapshot in CANVAS. Problem 1. A and B are partners in an electrical repair business. Their respective capital balances are P90,000 and P50,000, and they share profits or losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process, they elect to admit C into the partnership. Required: Prepare the journal entry to record the admission of C into the partnership and determine capital balances of A, B and C under each of the following condition: 1. Cacquires one-fourth interest of A's capital interest by paying 30,000 directly to him. 2. Cacquires one-fifth interest of each A and B capital interest. A receives P25,000 and B receives P15,000 directly from C. 3. Cacquires a one-fifth interest for a P60,000 cash investment in the partnership. Total capital after the admission is to be P200,000. 4. Cinvests P40,000 for a one-fifth interest in partnership capital, goodwill/asset revaluation to the old partners is to be recorded.
Make-up assignment Partnership Dissolution Instruction: Prepare the answers and solutions in written form using a clean paper (e.g. Yellow pad, bond paper, notebook etc.) and submit a snapshot in CANVAS. Problem 1. A and B are partners in an electrical repair business. Their respective capital balances are P90,000 and P50,000, and they share profits or losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process, they elect to admit C into the partnership. Required: Prepare the journal entry to record the admission of C into the partnership and determine capital balances of A, B and C under each of the following condition: 1. Cacquires one-fourth interest of A's capital interest by paying 30,000 directly to him. 2. Cacquires one-fifth interest of each A and B capital interest. A receives P25,000 and B receives P15,000 directly from C. 3. Cacquires a one-fifth interest for a P60,000 cash investment in the partnership. Total capital after the admission is to be P200,000. 4. Cinvests P40,000 for a one-fifth interest in partnership capital, goodwill/asset revaluation to the old partners is to be recorded.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Make-up assignment
Partnership Dissolution
Instruction: Prepare the answers and solutions in written form using a clean paper (e.g. Yellow pad, bond
paper, notebook etc.) and submit a snapshot in CANVAS.
Problem 1. A and B are partners in an electrical repair business. Their respective capital balances are
P90,000 and P50,000, and they share profits or losses equally. Because the partners are confronted with
personal financial problems, they decided to admit a new partner to the partnership. After an extensive
interviewing process, they elect to admit C into the partnership.
Required: Prepare the journal entry to record the admission of C into the partnership and determine
capital balances of A, B and C under each of the following condition:
1. Cacquires one-fourth interest of A's capital interest by paying 30,000 directly to him.
2. Cacquires one-fifth interest of each A and B capital interest. A receives P25,000 and B receives
P15,000 directly from C.
3. Cacquires a one-fifth interest for a P60,000 cash investment in the partnership. Total capital
after the admission is to be P200,000.
4. Cinvests P40,000 for a one-fifth interest in partnership capital, goodwill/asset revaluation to the
old partners is to be recorded.
Transcribed Image Text:Problem 2. On January 2, 2019, the capital balances and profit and loss ratio of A, B and C are as follows:
Partner
Capital
Profit and loss ratio
А
10,000
50%
В
15,000
30%
20,000
20%
On April 30, 2019, A withdraws from the partnership. The net income of the partnership for the four
months ended April 30, 2019 is P140,000. It is agreed that the inventory costing P5,000 has a market
value of P7,000 on April 30, 2019.
Required: Prepare the journal entries to record retirement and determine capital balances after
retirement in each of the independent assumption:
a. Assume that A agrees to accept payment from partnership equal to his interest.
b. Assume that A agrees to accept payment from the partnership amounting to P19,500, using the
bonus method. It is also agreed that the revaluation of inventory will be recorded.
c. Assume that A agrees to accept payment from the partnership amounting to P17,000, using the
asset revaluation method.
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