The capital balance and the profit and losssharing ratio of J, K, and R partnerships asof January 1, 1996 are:Capital J (40%) $120.000.000Capital K (20%). $80.000.000Runo Capital (40%) $140.000.000On January 3, 1996, the partners agreedto accept B into the partnership with a 25%interest in the capital and a return oninvestment of $110,000,000. Partnershipassets are not revalued.Requested:1. Determine the capital balance of thefour partners after the entry of Beno.2. What is the profit and loss sharing ratiofor Jedi, Kintan, Runo and Beno?

In the given question we are provided with the data of a partnership in which there are 3 partners.…

Answered: The capital balance and the profit and…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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Similar questions

The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
A partnership begins its first year of operations with the following capital balances: ABC, Capital DEF, Capital GHI, Capital P 110,000 80,000 110,000 According to the articles of partnership, all profits will be assigned as follows: ➤ ABC will be awarded an annual salary of P20,000 with P10,000 assigned to GHI. > The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. ➤ The remainder will be assigned on a 5:2:3 basis, respectively. > Each partner is allowed to withdraw up to P10,000 per year. Reminder from the Student Handbook: Code of Ethics- 24. Assume that the net loss for the first year of operations is P30,000 and that net income for the subsequent year is P40,000. Assume also that each partner withdraws the maximum amount from the business each period. What is the balance in ABC's capital account at the end of the first year?admission with invalidation of grade
A partnership begins its first year of operations with the following capital balances: Winston, Capital $ 52,000 Durham, Capital Salem, Capital 42,000 52,000 According to the articles of partnership, all profits will be assigned as follows: • Winston will be awarded an annual salary of $12,000 with $6,000 assigned to Salem. ⚫ The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2:3 basis, respectively. • Each partner is allowed to withdraw up to $5,000 per year. The net loss for the first year of operations is $20,000 and net income for the subsequent year is $25,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston's capital account at the end of the second year?
ABC partnership began its first year of operations with the following capital balances: A, Capital: P143,000 B, Capital: P104,000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: A was to be awarded an annual salary of P26,000 with P13,000 salary assigned to C Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year The remainder was to be assigned on a basis 5:2:3, respectively Each partner was allowed to withdraw up to P13,000 per year Assume that the net loss for the first year of operations was P26,000 with net income of P52,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year. Question: What was A, B, and C's share of income or loss for the year?
On December 31, 2030, the Statement of Financial Position of ABC Partnership provided the following data with profit or loss ratio of 1:6:3:Current Assets P2,600,000 , Total Liabilities P 600,000Noncurrent Assets 4,000,000 A, Capital 2,800,000B, Capital 1,400,000C, Capital 1,800,000 On January 1, 2031, D is admitted to the partnership by investing P2,000,000 to the partnership for 20% capital interest. If all the assets of the existing partnership are properly valued, what is the capital balance of C after the admission of D?a. P1,920,000b. P1,800,000c. P1,620,000d. P2,400,000
On December 31, 2030, the Statement of Financial Position of ABC Partnership provided thefollowing data with profit or loss ratio of 1:6:3:Current Assets P2,600,000 Total Liabilities P600,000Noncurrent Assets 4,000,000 A, Capital 2,800,000B, Capital 1,400,000C, Capital 1,800,000 On January 1, 2031, D is admitted to the partnership by investing P2,000,000 to the partnership for 20% capital interest. If an existing asset of ABC partnership is not properly valued, what is the capital balanceof B after the admission of D?a. P1,640,000b. P2,600,000c. P1,920,000d. P1,560,000
The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.
B, and C are partners with present capital balances of P40,000, P50,000, and P20,000, respectively. The partners share profits and losses according to the following percentages: 60% for A, 30% for B, and 10% for C. D is to join the partnership upon contributing P40,000 to the partnership in exchange for a 25% interest in capital and a 20% interest in profits and losses. An appraisal of the existing partnerships' assets reveals the following: Accounts Receivable P20,000 overvalued Inventory P10,000 overvalued Land P10,000 undervalued Building P15,000 undervalued Calculate the capital balances for each individual in the new partnership assuming use of the bonus method,.
The following are the capital account balances and profit and loss ratios of the partners in AB Partnership as of January 1, 20x2: Capital accounts A, Capital B, Capital 1,000,000 1,600,000 Profit or loss ratios 600,000 40% 60% On January 1, 20x2, C was admitted to the partnership when he acquired 20% interest in the net assets and profits of the firm for a P400,000 investment. The bonus method was used to record C's admission into the partnership. For the year 20x2, the partnership earned profit of P4,000,000. However, it was discovered that the following items were overstated: 20x1 20x2 Accrued income 80,000 100,000 Prepaid asset Accrued expense 140,000 200,000 160,000 240,000 Unearned income 60,000 40,000 How much is the share of A in the 20x2 profit?
A partnership begins its first year of operations with the following capital balances: Allegan, Capital Berrien, Capital $ 72,000 62,000 72,000 Kent, Capital According to the articles of partnership, all profits will be assigned as follows: Allegan will be awarded an annual salary of $20,000 with $10,000 assigned to Kent. The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2-3 basis, respectively. ⚫ Each partner is allowed to withdraw up to $5,000 per year. The net loss for the first year of operations is $28,000, and net income for the subsequent year is $30,000. Each partner withdraws the maximum amount from the business each period. Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations. Ending Capital Ending Capital Balance Year Balance Year One Two Prepare schedules that compute…
A partnership begins its first year of operations with the following capital balances: Winston, Capital $ 64,000 Durham, Capital 54,000 Salem, Capital 64,000 According to the articles of partnership, all profits will be assigned as follows: Winston will be awarded an annual salary of $12,000 with $6,000 assigned to Salem. The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2:3 basis, respectively. Each partner is allowed to withdraw up to $6,000 per year. The net loss for the first year of operations is $24,000 and net income for the subsequent year is $26,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston’s capital account at the end of the second year? a. $53,930 b. $59,930 c. $56,930 d. $46,300
On December 31, 2020, the Statement of Financial Position of ABC Partnership provided the following data with profit or loss ratio of 1:6:3: Current Assets Noncurrent Assets a. b. : 1,300,000 2,000,000 960,000 900,000 Total Liabilities A, Capital B, Capital C, Capital On January 1, 2021, D is admitted to the partnership by investing P1,000,000 to the partnership for 20% capital interest. C. 840,000 d. 1,200,000 300,000 1,400,000 If the all the assets of the existing partnership are properly valued, what is the capital balance of C after the admission of D? 700,000 900,000

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