Problem #12 Admission by Investment of Assets Mardaraog and Mercado are partners in Magdaraog and Mercado Partnership with Mtal balances of P550,000 and P350,000, respectively; they share income and loss in the ratio 1:3, respectively. The partners are considering the admission of San Pedro. Required: Prepare the entries to record the admission of San Pedro under each of the following independent situations: 1. San Pedro invested P100,000 cash in the partnership for a one-tenth interest. The net assets of the partnership are fairly valued. 2. San Pedro invested P140,000 cash in the partnership for a one-eight interest. Assets of the partnership are fairly valued except for equipment, which is undervalued by P80,000. Net assets of the partnership are to be revalued and San Pedro is to be admitted. 3. San Pedro is to receive a one-tenth interest in the partnership upon investing P180,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method. 4. San Pedro is to receive a 20% interest in the partnership upon investing P200,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method.

Problem #12 Admission by Investment of Assets Mardaraog and Mercado are partners in Magdaraog and Mercado Partnership with Mtal balances of P550,000 and P350,000, respectively; they share income and loss in the ratio 1:3, respectively. The partners are considering the admission of San Pedro. Required: Prepare the entries to record the admission of San Pedro under each of the following independent situations: 1. San Pedro invested P100,000 cash in the partnership for a one-tenth interest. The net assets of the partnership are fairly valued. 2. San Pedro invested P140,000 cash in the partnership for a one-eight interest. Assets of the partnership are fairly valued except for equipment, which is undervalued by P80,000. Net assets of the partnership are to be revalued and San Pedro is to be admitted. 3. San Pedro is to receive a one-tenth interest in the partnership upon investing P180,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method. 4. San Pedro is to receive a 20% interest in the partnership upon investing P200,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method.

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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developed in part a(3). etd 189fc64d53a0a6a71 PROBLEM C.11 Dividing Partnership Profit and LossLOC-10 Rothchild Furnishings, Inc., has three partners-Axle, Brandt, and Conrad. At the beginning of the current year their capital balances were: Axle, $180,000; Brandt, $140,000; and Conrad, $80,000. The partnership agreement provides that partners shall receive salary allowances as follows: Axle, $10,000; Brandt, $50,000; and Conrad, $28,000. The partners shall also be allowed 12 percent interest annually on their capital balances. Residual profit or loss is to be divided: Axle, one-half; Brandt, one-third; and Conrad, one-sixth. Instructions Prepare separate schedules showing how income will be divided among the three partners in each of the following cases. The figure given in each case is the annual partnership net income or loss to be allocated among the partners. Round calculations to the nearest dollar. a. Income of $526,000. b. Income of $95,000. c. Loss of $32,000. PROBLEM C.12 Who…
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