PROBLEM 1 Melvin Tan Jr. and Edgar Esparaguera are partners who have capital balances and profit and loss ratio to be shared as follows: P/L Ratio M. Tan Jr. E. Esparaguera Capital Balances P350,000 P400,000 3/5 2/15 Mr. Wilfredo Carreon was admitted in the partnership by buying % of the interest of Esparaguera for P300,000. Required: Prepare a journal entry to record the admission of Mr. Carreon in the partnership.

PROBLEM 1 Melvin Tan Jr. and Edgar Esparaguera are partners who have capital balances and profit and loss ratio to be shared as follows: P/L Ratio M. Tan Jr. E. Esparaguera Capital Balances P350,000 P400,000 3/5 2/15 Mr. Wilfredo Carreon was admitted in the partnership by buying % of the interest of Esparaguera for P300,000. Required: Prepare a journal entry to record the admission of Mr. Carreon in the partnership.

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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Question # 03 A and B are partners in a partnership firm. They share profits and losses in the ratio 1:1. Their balance sheet is given below: Balance Sheet Accounts payable A's Capital Cash 45,000 45,000 Other assets 900,000 450,000 B's Capital 450,000 945,000 945.000 They decided to admit C as a new partner for 4 interests in the firm. Required: Give entries in general journal to record admission of C and prepare balance sheet in cach of the following cases separately using Goodwill Method. C invests Rs. 300,000 cash C invests Rs. 270,000 cash C invests Rs. 378,000 cash Case - 1 Case - 2 Case - 3
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 Jenson, Capital 3/1 180,000 1/n 1,200,000 140,000 100,000 9/1 800,000 160,000 60,000 4/1 7/1 11/1 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally.
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k The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances/loss percent) Decrease highest LAP to next highest Debit $ 7,808 34,000 24,808 99,908 Decrease LAPs to next highest: $ 164,908 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent. 3. The partners are considering an offer of $110,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $110,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30, 20X1,…
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