On December 31, 2015, the adjusted trial balance of Shoe Co. has the following balances: Total assets of P2,250,000; Nike, capital P643,750; Adidas, capital P481,250; and Vans, capital P1,125,000. The partners share profits and losses in the ratio of 1:1:2, respectively. It was agreed among the partners that Nike retires from the partnership. The partnership assets are to be adjusted to their fair value of P2,550,000 as of December 31, 2015 before the capital balance of Nike is closed. The partnership also suffered a net loss of P750,000 for the current year. The partnership paid Nike the amount of P542,500 cash for his total interest in the partnership. What is the total capital of Adidas after the retirement of Nike? A. P372,500 B. P368,750 C. P365,000 D. P497,500
On December 31, 2015, the adjusted trial balance of Shoe Co. has the following balances: Total assets of P2,250,000; Nike, capital P643,750; Adidas, capital P481,250; and Vans, capital P1,125,000. The partners share profits and losses in the ratio of 1:1:2, respectively. It was agreed among the partners that Nike retires from the partnership. The partnership assets are to be adjusted to their fair value of P2,550,000 as of December 31, 2015 before the capital balance of Nike is closed. The partnership also suffered a net loss of P750,000 for the current year. The partnership paid Nike the amount of P542,500 cash for his total interest in the partnership. What is the total capital of Adidas after the retirement of Nike? A. P372,500 B. P368,750 C. P365,000 D. P497,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:9. On December 31, 2015, the adjusted trial balance of Shoe Co. has the following balances: Total assets of P2,250,000; Nike,
capital P643,750; Adidas, capital P481,250; and Vans, capital P1,125,000. The partners share profits and losses in the ratio
of 1:1:2, respectively. It was agreed among the partners that Nike retires from the partnership. The partnership assets are
to be adjusted to their fair value of P2,550,000 as of December 31, 2015 before the capital balance of Nike is closed. The
partnership also suffered a net loss of P750,000 for the current year. The partnership paid Nike the amount of P542,500
cash for his total interest in the partnership.
What is the total capital of Adidas after the retirement of Nike?
A. P372,500
B. P368,750
C. P365,000
D. P497,500
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