Mike P139,200 1/2 Romeo 208,800 1/3 Golf 96,000 1/6 On June 1, 2020, Echo is admitted to the partnership when Echo purchased, for P132,000,a roportionate interest from Mike and Golf in the net assets and profits of the partnership. As a result of he transaction, Echo acquired one-fifth interest in the net assets and profits of the firm. What is the ombined gain realized by Mike and Golf upon the sale of a portion of their interest in the partnership to cho?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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1. The capital accounts of the
(see the image)
a. Zero
b. P43,200
c. P62,400
d. P82,000
3. Jon Snow and Jack Frost are partners who share in the profits and losses in the ratio of 7:3, respectively. On October 21, 2020, their respective capital accounts were as follows: Jon Snow P35,000; Jack Frost, P30,000. On the same date they agreed to admit Brownie as a partner with a one-third interest in the capital and profits and losses, and upon his investment of P25,000. The new partnership will begin with a total of P90,000. Immediately after Brownie's admission, what are the capital balance of Jon Snow, Jack Frost and Brownie?
a. P30,000: P30,000; P30,000
b. P31,500; P28,500; P30,000
c. P31,667; P28,333; P25,000
d. None of the above
5. Oscar and Tango are partners with capital balances of P60,000 and P20,000, respectively. Profits and losses are divided in the ratio of 60:40 for Oscar and Tango, respectively. Oscar and Tango decided to form a new partnership with Yankee, who invested land valued at P15,000 for a 20% capital interest in the new partnership. Yankee's cost of land was P12,000. The partnership elected to use the bonus method to record the admission of Yankee into the partnership. Yankee's capital account should be credited for:
a. P12,000
b. P15,000
c. P16,000
d. P19,000
6. As of December 31 of the current year, the books of ABC partnership showed capital balances of Sisa, P80,000; Lola, P50,000; Uma, P10,000. The partners'
a. P84,000
b. P80,000
c. P90,000
d. P100,000
7. X, Y and Z have capital balances of P40,000, P50,000 and P18,000, respectively and a profit and sharing ratio of 4:2:1, respectively. If X received P8,000 upon liquidation of the partnership, the total amount received by all the partners was:
a. P108,000
b. P56,000
c. P52,000
d. P24,000
8. J, L and V are partners sharing profits 30%, 20% and 50% and with capital balances of P350,000, P250,000 and P350,000, respectively. That partners agreed to dissolve their partnership and upon liquidation, all of the partnership's assets are sold and sufficient cash is realized to pay all claims except one for P50,000. V is personally insolvent, but the other two partners are capable for meeting any indebtedness of the firm. Of the remaining claim against the firm, J is to absorb:
a. P15,000
b. P25,000
c. P30,000
d. P40,000
9. S and T are partners sharing profits equally and with capital balances, respectively, if P750,000 and P500,000. The firm owes T P200,000 as evidenced by a promissory note. Upon liquidation, cash of P300,000 becomes available for distribution to the partners. In the final distribution, the respective shares of S and T will be:
a. P150,000 and P150,000
b. P175,000 and P125,000
c. P200,000 and P100,000
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