Tom and Jerry are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances on Sept. 30, 2021. Tom, Capital, P 100,000 credit and Jerry, Capital, P 150,000 credit. The partners agreed to admit Ben to the partnership. Required: Calculate the capital balances of each partner after the admission of Ben, assuming that the bonuses are recorded for each of the following assumptions: a) Ben paid Tom P50,000 for 40% of his interest. b) Ben invested P 50,000 for a one-sixth interest in the partnership. c) Ben invested P 50,000 for 25% interest in the partnership. d) Ben invested P 50,000 for 15% interest in the partnership.
Tom and Jerry are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances on Sept. 30, 2021. Tom, Capital, P 100,000 credit and Jerry, Capital, P 150,000 credit. The partners agreed to admit Ben to the partnership. Required: Calculate the capital balances of each partner after the admission of Ben, assuming that the bonuses are recorded for each of the following assumptions: a) Ben paid Tom P50,000 for 40% of his interest. b) Ben invested P 50,000 for a one-sixth interest in the partnership. c) Ben invested P 50,000 for 25% interest in the partnership. d) Ben invested P 50,000 for 15% interest in the partnership.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tom and Jerry
Answer letter c and d. Please show solution/explanation.
Transcribed Image Text:I.
Tom and Jerry
Tom and Jerry are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances
on Sept. 30, 2021. Tom, Capital, P 100,000 credit and Jerry, Capital, P 150,000 credit. The partners agreed to admit Ben
to the partnership.
Required: Calculate the capital balances of each partner after the admission of Ben, assuming that the bonuses are recorded
for each of the following assumptions:
a) Ben paid Tom P50,000 for 40% of his interest.
b) Ben invested P 50,000 for a one-sixth interest in the partnership.
c) Ben invested P 50,000 for 25% interest in the partnership.
d) Ben invested P 50,000 for 15% interest in the partnership.
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