Problem #2 (Adapted) In a high school reunion, Tres met former classmate Uno and Dos. He learned that the two partners in a business of buying and selling general merchandise. While the business is profitable, it encounters occasional cash shortages due to growing investments in inventories and receivables. Tres was then invited to join the partnership of Uno and Dos by making a cash investment. At the time of his entry, the capital balances of Uno and Dos amounted to P40,000 and P200,000, respectively. They share profit and loss in the ratio of 6:4. Required: A. Prepare the journal entry to record the admission of Tres assuming: 1. He invested P300,000 for 1/3 interest in the partnership. 2. He invested P200,000 for a 20% interest in the partnership. 3. He invested P400,000 for a 50% interest in the partnership.
Problem #2 (Adapted) In a high school reunion, Tres met former classmate Uno and Dos. He learned that the two partners in a business of buying and selling general merchandise. While the business is profitable, it encounters occasional cash shortages due to growing investments in inventories and receivables. Tres was then invited to join the partnership of Uno and Dos by making a cash investment. At the time of his entry, the capital balances of Uno and Dos amounted to P40,000 and P200,000, respectively. They share profit and loss in the ratio of 6:4. Required: A. Prepare the journal entry to record the admission of Tres assuming: 1. He invested P300,000 for 1/3 interest in the partnership. 2. He invested P200,000 for a 20% interest in the partnership. 3. He invested P400,000 for a 50% interest in the partnership.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #2 (Adapted)
In a high school reunion, Tres met former classmate Uno and
Dos. He learned that the two partners in a business of buying
and selling general merchandise. While the business is
profitable, it encounters occasional cash shortages due to
growing investments in inventories and receivables. Tres was
then invited to join the partnership of Uno and Dos by making a
cash investment. At the time of his entry, the capital balances of
Uno and Dos amounted to P40,000 and P200,000, respectively.
They share profit and loss in the ratio of 6:4.
Required:
A. Prepare the journal entry to record the admission of Tres
assuming:
1. He invested P300,000 for 1/3 interest in the partnership.
2. He invested P200,000 for a 20% interest in the
partnership.
3. He invested P400,000 for a 50% interest in the
partnership.
B. Determine the composition and the total partnership capital
in each of the scenario in A.
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