On December 31, 2020, the Statement of Financial Position of ABC Partnership is presented below:AssetsLiabilities and CapitalPayable to AA, CapitalB. CapitalC. CapitalTotal Liabilities & Capital P 90,000AssetsP 90,0005,00020,75019,25045.000Total AssetsP 90,000A, B, and C share profits and losses in the ratio of 25%, 25% and 50%, respectively. It was agreed among thepartners that A retires from the partnership and the partnership assets to be adjusted to their fair market value ofP102.000 as of December 31, 2015. The partnership would pay A P30,250 cash for his total interest in thepartnership. What is the capital balance of B after the retirement of A?

Retirement of the partner is the process where a partner ceases to be a part of the partnership. The…

Answered: On December 31, 2020, the Statement of…

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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-X, Y, and Z formed a partnership on Jnauary 1, 2021, and contributed P150,00; P200,000; P300,000, respectively. Their articles of co-partnership provide that the operating income be shared among partners as follows: as salary, P24,000 for X; P18,000 for Y; and P12,000 for Z; interest of 12% on the average capital during 2021 of the three partners; and the remainder in the ratio of 4:2:4, respectively. The operating income for the year-end December 31, 2021 amounted to P200,000. X contributed additional capital of P30,000 on July 1, and made a drawing of P10,000 on October 1; Y contributed additional capital of P20,000 on August 1, and made a drawing of P10,000 on October 1; and Z made a drawing of P30,000 on November 1, 2021. How much is the average capital of partner X? *
Aquila partnership began its first year of operations with the following capital balances: N, Capital: P143,000 A, Capital: P104, 000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: -N was to be awarded an annual salary of P26,000 with P13,000 salary assigned to C -Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. -The remainder was to be assigned on a 4:3:3 basis, respectively. -Each partner was allowed to withdraw up to P13,000 per year. Assume that the net loss for the first year of operations was P36,000 with net incomeof P42,000 in the second year. Assume further that each partner withdrew the maximum amount fiom the business each year. A. What was C's share of income or loss for the first year? B. What was the balance in C's capital account at the end of the second year?
The condensed Balance Sheet of the XY partnership on December 31, 2024, appears below. $ 60,000 $ 60,000 200,000 90,000 110,000 $260.000 Cash Other Assets Total Assets Liabilities X, Capital Y, Capital Total Liabilities and Capital $260.000 X and Y share profits and losses in the ratio 40:60. Each of the following questions is independent of the others. Prepare journal entries for each of the following: Show all computations. a. Refer to the above information. Assume that Z purchases a one-fourth of Y's capital interest directly from Y for a total of $60,000. (Direct purchase) Compute each partner's balance after Z is admitted. b. Refer to the above information. Assume Z invests $60,000 cash into the XY partnership for a one-fourth interest in partnership capital and profits. (Bonus method) Compute each partner's balance after Z is admitted.
Item Nos. 17 and 18 are based on the following information: The balance sheet for the partnership of Lia, Mia, and Pia, who share profits in the ratio of 2:1:1, respectively, shows the following balances just before liquidation: Cash P 12,000 Liabilities P 20,000 Noncash Assets- 59,500 Lia Capital --- 22,000 Mia Capital 15,500 Pia Capital--- 14,000 P 71,500 P 71,500 On the first month of liquidation, certain assets were sold for P 32,000. Liquidation expenses of P 1,000 were paid and additional liquidation expenses in the future are still anticipated. Liabilities were paid amounting to P 5,400 and sufficient cash was retained to ensure the payment to creditors before making payments to the partners. On the first payment to partners, Lia received P 6,250. 17. The total cash distributed to the partners in the first installment was: a. P 12,500. C. P 25,000. b. P 20,000. d. P 37,600. 18. The amount of cash withheld for anticipated liquidation expenses and unpaid liabilities was: a. P…
X and Y are partners and have beginning capital balances of P 360,000 and P 600,000 respectively. Partnership profits and losses are allocated as follows salaries of P 160,000 and P 200,000 to X and Y, respectively, 10% interest on their beginning capital balances, any remaining profit is divided equally Partnership profit of P 600,000 is allocated as follows: A. X =P 300,000,V-P 300,000 B. X =P.280,000,Y-P320,000 C. X =P 2600. V - P * 332000 D. X = P * 192000Y = P * 40B, 0
The capital balance and the profit and loss sharing ratio of J, K, and R partnerships as of January 1, 1996 are: Capital J (40%) $120.000.000 Capital K (20%). $80.000.000 Runo Capital (40%) $140.000.000 On January 3, 1996, the partners agreed to accept B into the partnership with a 25% interest in the capital and a return on investment of $110,000,000. Partnership assets are not revalued. Requested: 1. Determine the capital balance of the four partners after the entry of Beno. 2. What is the profit and loss sharing ratio for Jedi, Kintan, Runo and Beno?
The capital account balances of the partners in ABC Partnership on June 30, 20x1 before any necessaryadjustments are as follows:Capital accountsA, Capital (20%)B, Capital (30%)C, Capital (50%)Total600,0001,000,000400,0002,000,000The partnership reported profit of P3,600,000 for the six months ended June 30, 20x1.Required:1. On July 1, 20x1, C withdraws from the partnership when he was bought-out by his co-partners forP2,480,000 cash. How much is the capital balance of A immediately after the withdrawal of C? Show computation. 2. Cretires on July 1, 20x1. It was agreed that C shall receive P2,480,000 cash from the partnership insettlement of his interest. How much is the capital balance of B right after the withdrawal of C? Show computation.3. Cretires on July 1, 20x1. It was agreed that C shall receive cash of P2,000,000 and equipment withcarrying amount of P400,000 and fair value of P1,200,000 as settlement of his interest in thepartnership. Provide journal entries upon C's…
X and Y are partners and have beginning capital balances of P 360,000 and P 600,000, respectively. Partnership profits and losses are allocated as follows: salaries of P 160,000 and P 200,000 to X and Y, respectively; 10% interest on their beginning capital balances, any remaining profit is divided equally. Partnership profit of P 600,000 is allocated as follows: a. X – P 300,000; Y – P 300,000 b. X – P 280,000; Y – P 320,000 c. X – P 268,000; Y – P 332,000 d. X – P 192,000; Y – P 408,000
A, B, and C are partners with present capital balances of P40,000, P50,000, and P20,000, respectively. The partners share profits and losses according to the following percentages: 60% for A, 30% for B, and 10% for C. D is to join the partnership upon contributing P40,000 to the partnership in exchange for a 25% interest in capital and a 20% interest in profits and losses. An appraisal of the existing partnerships' assets reveals the following: Accounts Receivable P20,000 overvalued Inventory P10,000 overvalued Land P10,000 undervalued Building P15,000 undervalued Calculate the capital balances for each individual in the new partnership assuming use of the bonus method.
Problem 15. On December 31, 2020, the Statement of Financial Position of ABC Partnershipwith profit or loss ratio of 5:3:2 is presented below: CashP1,600,000Total LiabilitiesP2,000,000 Non Cash Assets1,400,000A, capital100,000 B, capital500,000 C, Capital400,000 On January 1, 2021, the partners decided to liquidate the partnership ininstallment. All partners are legally declared to be personally insolvent. As of January 31, 2021, the following transactions occurred: - Noncash Assets with book value of P1,000,000 were sold at a gain ofP100,000.00 - Liquidation expenses for the month of January amounting to P50,000 werepaid. - It is estimated that liquidation expenses amounting to P150,000 will be incurred For the month of February, 2021. - 20% of the liabilities to third person were settled. - Available cash were distributed to partners As of February 28, 2021, the following transactions occurred: - Remaining noncash assets were sold at a loss of P100,000 - The remaining liabilities to…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 375000 x Capital A/c 112500 Y Capital A/c 50000 Sundry creditors 100000 Sales (net) 50000 Discount Land and Buildings Plant and Machinery 125000 75000 Wages 62500 Opening Stock of Finished Goods 812500 Opening Stock of Raw material Opening Stock of Work in Progress Sundry debtors 6250 45000 Provision for bad debts 3750 125000 Commission 3750 Y's Loan A/c 2250 25000 Carriage inwards 75000 Carriage outwards Factory Expenses 18750 Royalties 3750 Purchase of Raw material (net) 187500 16250 7250 10000 Factory rent & taxes Discount Office rent Insurance 5000 3750 18750 30000 20500 1185000 The following additional information is to be taken into consideration: Bad debts Office Expenses Salaries of works manager Cash at bank…
The following is the financial position of RST Partnership on December 31 2020 Assets P60,000.00 Other Noncash Assets 70,000.00 Total P130,000.00 Liabilties and Equity Accounts Payable P20,000.00 R, Capital 50,000.00 S, Capital T. Capital (Limited Partner) 35,000.00 25,000.00 P130,000.00 0.00 The Partners' share profit and loss ratio is 2:3:5 respectively. The following are liquidation transactions: February March April Cash Proceeds P10,000.00 P10,000.00 P13,000.00 Books Value of the asset Sold 35,000.00 20,000.00 15,000 00 Liquidation Expenses 5,000.00 6,000.00 3,000.00 Liabilties Paid 10.000.00 5,000.00 5,000.00 Reserve for Future Liquidation Expense 13,000.00 4,000.00 Compute the cash distribution on February S Compute the cash distribution on March f Compute the cash distribution on April R IS

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