| balances: A (60%) P100,000; B (30%) P60,000; and C (10%) P20,000.A, B and C are partners with the following P/L ratio and capitalCase 4: D wants to infuse capital to the partnership for a 10%interest in the net assets and profits. The partners determine thatthe net assets are fairly valued except for land carried at P365,000but has a fair value of P410,000. If no bonus is to be given to anypartner, how much is D's required investment?

Dissolution of partnership is change in the relation of partners due to any partner being dissolute…

Answered: | balances: A (60%) P100,000; B (30%)…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

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.
1. Jag, Lee and Bench are partners having the following capital balances of P11,200, P13,000 and P5,800 respectively. Profits and losses are shared 4:2:1. How much is the loss absorption capacity of Lee?Required to answer. Single choice. a. P13,000 b. P45,500 c. P26,000 d. cannot be determined 2. Lebron and Wade, partners who share profits and losses equally decided to liquidate their partnership by installment. The statement of financial position showed Cash – P 35,000; P Liabilities – P 20,000; Lebron, Capital – P71,000; and Wade, Capital – P 54,000. Liquidation expenses amounted to P 10,000. How much cash can be distributed safely toeach partner at this point? a. Lebron-P3,000; Wade- P0 b. Lebron-P5,000; Wade-P500 c. Lebron-P5,000; Wade-0 d. Lebron- P5,000; Wade- P1,0003. On December 31, 2020 and 2019, Bucks Corporation had 105,000 Ordinary Shares issued, 5,000 shares in the treasury, 10,000 shares subscribed and 10,000 5% Preference Shares, cumulative issued, P 100…
A&B form a partnership with A being the limited partner (LP)who will invest $150,000 and B being the general partner (GP). The group finds a property for $700,000 and takes a mortgage for $550,000, interest only at 6%. They agree to a 90/10 split on the profits and distributions while the property is owned by the group. Assume the following: Gross Income- $125,000 LESS VACANCY- $6,250 LESS OPERATING EXPENSES - $27,000 What is the capital account of investor A (the LP) $87,000 $97,125 $139,875 $150,000
The ABC partnership has three equal partners, A, B, and C, and the following balance sheet: Assets Partner's Capital Adj. Basis FMV Adj. Basis FMV Cash 60,000 60,000 A 70,000 80,000 Cap Asset 1 90,000 60,000 B 70,000 80,000 Cap Asset 2 40,000 60,000 C 70,000 80,000 Cap Asset 3 20,000 60,000 210,000 240,000 210,000 240,000 A receives capital asset #1 in an operating distribution. A has a one-ninth interest worth $20,000 in the partnership capital and profits after the distribution. (a) What results to A and the partnership if there is no §754 election? Reconstruct the balance sheet after the distribution. (b) What results to A and the partnership if the partnership has made a §754 election? Reconstruct the balance sheet after the distribution. (c) How should any basis adjustment be allocated among the partners?
Sammer an Moneer are partners having capital balances of 100,000 and 120,000 respectively, they admit Tala to a one third interest in the partnership capital and profits for investment 130,000, if good method is used in recording tala admission to the parnership: OA. sameer capital will be 120,000 OB. moneer capital will be 130,000 O c. tala capital will be 170,000 OD. good will be recorded to sameer $10,000
For the year 2021, the partnership of AMMAR and BANU realized a net profit of P240,000. The capital accounts of the partners show the following postings: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 AMMAR Debit Credit Debit Credit 20,000 10,000 120,000 BANU 10,000 10,000 5,000 80,000 20,000 Question 5 If the profits are to be divided based on average capital, how much will be the share of AMMAR?
A and B are partners who share profits and losses in a ratio of 1:2 with capital balance of 900k and 1.8M respectively. both of them agreed to admit C as partner with 900k investment for a 25% share interest in the partnership B's capital balance should be?
2. Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of P370,000 and fair value of P300,000 while Nail contributed cash of P180,000. Hammer and Nail agreed to have a 60:40 interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much? a. Hammer, P20,000 b. Nail, P20,000 c. Hammer, P70,000 d. Nail, P70,000
X, Y and Z of XYZ Partnership have beginning capital balances of P500,000, P400,000, and P300,000 respectively. The firm has obtained a net profit of P112,000 Salaries of P15,000, P20,000, and P25,000 will be given to each partner respectively, and interest at 3% of the beginning capital balances would be allowed in profit distribution. Any remaining amount will be divided to each partner at 3:11 the share of each partner in the net income would be A.P28.080 P50.560: P33.360 B.P28,080, P35,200; P48,720 C.P39,600 P35,2 10, P37,200 D. P35,600, P-50,5-50; P21,540
7. Determine the capital to be credited to Austin. Celestine and Jewel are partners who share income in the ratio of 2:3. The partners agree to admit Austin as a partner upon investing P150,000 cash for a 1/5 interest in the firm. The assets of the firm are fairly valued except for a building that is overvalued by P150,000. The capital accounts of Celestine and Jewel show balances of P450,000 and P300,000.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS