Problem 7 Admission by Investment of Assets (Incentive Activity) Partners Pilapil and Pastor sell electronic equipment and supplies. They wish to expand their computer lines and decided to admit Generales to the partnership. Pilapil’s capital is Php 2,000,000, Pastor’s capital is Php 1,600,000, and they share income in the ratio of 3:2, respectively. Required: Prepare the journal entries to record the admission of Generales for each of the following independent situations: Generales directly purchased half of Pastor’s investment in the partnership for Php 900,000. Generales invested Php 1,100,000 for a one-fourth interest. Goodwill will be recognized. Generales invested Php 800,000 for a one-fifth interest in the total capital of Php 4,400,000.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Problem 7 Admission by Investment of Assets (Incentive Activity)
Partners Pilapil and Pastor sell electronic equipment and supplies. They wish to expand their computer lines and decided to admit Generales to the
Required:
Prepare the
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Generales directly purchased half of Pastor’s investment in the partnership for Php 900,000.
-
Generales invested Php 1,100,000 for a one-fourth interest.
Goodwill will be recognized. -
Generales invested Php 800,000 for a one-fifth interest in the total capital of Php 4,400,000.
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Generales invested Php 1,000,000 for one-fifth interest. Goodwill is to be recognized.
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