Answered: Partner C decided to retire when the…

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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1. Partner C decided to retire when the partners’ capital balances were: A, ₱600,000; B, ₱600,000; and C, ₱400,000. It was agreed that Partner C is to take the partnership’s fully depreciated equipment with a fair value of ₱24,000 and a note for the balance of her interest. The historical cost of the equipment is ₱36,000. The partners share in profits and losses equally. How much is the total partnership capital after the retirement of C?

1,216,000

1,261,000

1,264,000

1,624,000

2.Apple, Samsung, Lenovo, and Huawei are partners with interests of P60,000 (30%); P65,000 (20%); P26,000 (10%) and P90,000 (40%) to Apple, Samsung, Lenovo, and Huawei each, respectively. Assume that the partners admit Oppo into the partnership. Oppo is to invest P50,000 and to purchase 1/4 of the capital balances of Samsung and Lenovo for P25,000 with the assets being adjusted. Oppo is to have 20% share in the new partnership and a 15% share in the profits and losses. The agreed capital of the partnership after the admission of Oppo is P310,000. Determine the capital balance of Apple after the admission of Oppo.

3.Jen, Raks, and Fred are partners with average capital balances during 2019 of P945,000, P477,300, and P324,700, respectively. The partners receive 10% interest on their average capital balances; after deducting salaries of P244,650 to Jen and P165,250 to Fred, the residual profits or loss is divided equally. In 2019, the partnership had a net loss of P251,248 before the interest and salaries to partners. By what amount should Jen’s and Fred’s capital account change – increase (decrease)?

Jen, P60,534; Fred, (P80,896)

Jen, P58,952; Fred, P35,072

Jen, P56,716; Fred, P64,916

Jen, P81,688; Fred, P62,470

4. Basti Co. delivered 150 portable gas stoves to Sarah Co. on consignment. These stoves cost P2,700 each and could be sold for P4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that Basti Co. would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others, the following information: Advertising P6,750; Delivery Expense P3,375 and Commission P10,135. How many units were sold by Sarah during the first month?

5. Basti Co. delivered 150 portable gas stoves to Sarah Co. on consignment. These stoves cost P2,700 each and could be sold for P4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that Basti Co. would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others, the following information: Advertising P6,750; Delivery Expense P3,375 and Commission P10,135. 2.How much is the amount remitted by Sarah to Basti for the first month?

22,950

20,250

67,500

47,250

6. Basti Co. delivered 150 portable gas stoves to Sarah Co. on consignment. These stoves cost P2,700 each and could be sold for P4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that Basti Co. would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others, the following information: Advertising P6,750; Delivery Expense P3,375 and Commission P10,135. The consignment profit (loss) to Basti is

16,875

10,125

6,750

20,250

The partnership of Ray, May and Jay is to be liquidated. Their books reflect beginning cash balances of P200,000;
Liabilities of P350,000, Ray Capital (30%), P300,000; May Capital (25%), P450,000 and Jay Capital, (45%), P350,000.
The partnership is to be liquidated on an installment basis. The details of the first two installment sales of the partnership
follow:
Book Value Sales Price
of Non-cash of Non-cash Liquidating Liabilities Liquidating
Assets sold Assets sold Expenses
P 250,000
100,000
Expected
Paid
Expenses
1st Sale
2nd Sale
P 205,000
30,000
P 20,000 P 150,000 P 25,000
10,000
150,000
30,000
Cash is distributed to the partners as it becomes available. In the 3rd installment sale, P200,000 of the NCAS are sold for
P150,000; P30,000 of the liabilities and P10,000 liquidating expenses are paid; and P130,000 cash is distributed to the
partners.
Determine the capital of May after the 1st installment sale of the Non-cash assets.

The statement of affairs of Darrell Putix Co. indicates that unsecured creditors without priority with total claims of
P720,000 may expect to recover only P288,000 after all the assets were sold. Among the creditors of Darrell Putix Co.
are the following:
Government – taxes payable of P400,000, inclusive of P80,000 assessments and surcharges.
• XYZ bank – loan payable of P4,000,000 and accrued interest of P200,000, backed by collateral security with
realizable value of P4,800,000.
• Alpha Financing Co. - loan payable of P3,200,000 backed by collateral security with realizable value of
2,000,000.
Mr. Bombay – loan payable of P1,000,000 and accrued interest of P200,000. No collateral security.
How much is the expected recovery of partially secured creditors?

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