PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:O acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? a. P 62, 200. 15 b. P 52,200.15 c. P 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5
PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:O acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? a. P 62, 200. 15 b. P 52,200.15 c. P 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PARTNERSHIP DISSOLUTION
M and N admits O as a new partner. The partnership statement of financial position immediately before the
admission of C is shown below:
Cash
Accounts Receivable
Inventory
Total Assets
28,000
118,000
187,000
333,000
Accounts Payable
M, Capital (70%)
N, Capital (30%)
Total Liabilities & Equity
65,000
172,000
96,000
333,000
The following adjustments are determined:
a. The recoverable amount of the account receivable is P117,401.
b. A P30,000 recovery of a previous write-down on the inventory should be recognized.
c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized.
Case # 1:0 acquires half of N's interest for P 120,000.
Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest.
Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired.
For items 16-18, refer to Case #1
16. How much is the balance of M's capital account after O's admission?
а. Р 191,600.70
b. Р 192,600.7о
с. Р 193,600.80
d. P 194,600
17. How much is the balance of N's capital account after O's admission?
а. Р62, 200. 15
b. Р52,200.15
с. Р 52,201.15
d. P 62, 201.15
18. What is the profit or loss sharing ratio of the partners after O's admission?
a. 50-50-50
b. 75-20-5
Transcribed Image Text:c. 70-15-15
d. 65-20-15
19. Under Case # 2, Scenario A: how much is the balance of M's capital account after O's admission?
а. Р 193,601.8
b. P 192,600.7
P 193,600.8
P 191,600.7
C.
d.
20. Under Case # 2, Scenario B: how much is the balance of N's capital account after O's admission?
а. Р98,776.3
b. P 98,777.3
c. P 99,777.3
d. P 98,775.3
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