Allen, Barkley and Charles, partners of ABC Enterprises, have agreed on a profit and loss ratio of 3:3:4, respectively. On December 31, 2016, the partnership books showed the following capital balances: Allen - P 450,000; Barkley-P 540,000; Charles-P 900,000 On January 1, 2017, Derek was admitted as a new partner under the following terms and conditions: a. b. Derek will share % (25%) in the profit and loss ratio, while the ratio of the original partners will remain proportionately the same as before Derek's admission. Derek will purchase 1/6 of Barkley's interest paying him P 75,000. c. d. Derek will contribute P 450,000 in cash to the partnership. Total partnership capital after Derek's admission will be P 2,400,000 (AC) of which Derek's capital interest will be P 480,000.(ACNP) Instructions: 1. Using the format below, prepare a schedule showing the capital of each partner before and after the admission of Derek. Allen Barkley Charles Derek Total Capital balances before the admission of Derek P 450,000 P 540,000 P 900,000 P 1,890,000 2. What is the profit and loss ratio of all the partners after Derek's admission?

Allen, Barkley and Charles, partners of ABC Enterprises, have agreed on a profit and loss ratio of 3:3:4, respectively. On December 31, 2016, the partnership books showed the following capital balances: Allen - P 450,000; Barkley-P 540,000; Charles-P 900,000 On January 1, 2017, Derek was admitted as a new partner under the following terms and conditions: a. b. Derek will share % (25%) in the profit and loss ratio, while the ratio of the original partners will remain proportionately the same as before Derek's admission. Derek will purchase 1/6 of Barkley's interest paying him P 75,000. c. d. Derek will contribute P 450,000 in cash to the partnership. Total partnership capital after Derek's admission will be P 2,400,000 (AC) of which Derek's capital interest will be P 480,000.(ACNP) Instructions: 1. Using the format below, prepare a schedule showing the capital of each partner before and after the admission of Derek. Allen Barkley Charles Derek Total Capital balances before the admission of Derek P 450,000 P 540,000 P 900,000 P 1,890,000 2. What is the profit and loss ratio of all the partners after Derek's admission?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 20P

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Allen, Barkley and Charles, partners of ABC Enterprises, have agreed on a profit and loss ratio of 3:3:4, respectively. On December 31, 2016, the partnership books showed the following capital balances: Allen - P 450,000; Barkley - P 540,000; Charles - P 900,000 On January 1, 2017, Derek was admitted as a new partner under the following terms and conditions: Derek will share ¼ (25%) in the profit and loss ratio, while the ratio of the original partners will remain proportionately the same as before Derek's admission. а. b. Derek will purchase 1/6 of Barkley's interest paying him P 75,000. С. Derek will contribute P 450,000 in cash to the partnership. d. Total partnership capital after Derek's admission will be P 2,400,000 (AC) of which Derek's capital interest will be P 480,000.(ACNP) Instructions: Using the format below, prepare a schedule showing the capital of each partner before and after the admission of Derek. 1. Allen Barkley Charles Derek Total Capital balances before the…
Allen, Barkley and Charles, partners of ABC Enterprises, have agreed on a profit and loss ratio of 3:3:4, respectively. On December 31, 2016, the partnership books showed the following capital balances: Allen - P 450,000; Barkley - P 540,000; Charles – P 900,000 On January 1, 2017, Derek was admitted as a new partner under the following terms and conditions: Derek will share % (25%) in the profit and loss ratio, while the ratio of the original partners will remain proportionately the same as before Derek's admission. a. b. Derek will purchase 1/6 of Barkley's interest paying him P 75,000. C. Derek will contribute P 450,000 in cash to the partnership. Total partnership capital after Derek's admission will be P 2,400,000 (AC) of which Derek's capital interest will be P 480,000.(ACNP) d. 2. What is the profit and loss ratio of all the partners after Derek's admission?
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances: Herbert , Capital 25,000 Ireneo , Capital 15,000 At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits. Assumptions: a. Joshua is admitted by purchase of interest. b. Joshua is admitted by purchase of interest from Herbert . c. Joshua is admitted by investment and Bonus Method is used. d. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used. e. Joshua is admitted by investment and the adjusted capital after his admission is 90,000 Answer the following questions for each assumption: i. What will be the total capital of the partnership upon Joshua's admission? ii. What will be the new partnership sharing agreement? iii. What amount of capital will be credited to…
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances: Herbert , Capital 25,000 Ireneo , Capital 15,000 At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits. Assumptions: a. Joshua is admitted by purchase of interest. b. Joshua is admitted by purchase of interest from Herbert . c. Joshua is admitted by investment and Bonus Method is used. d. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used. e. Joshua is admitted by investment and the adjusted capital after his admission is 90,000. Required: 1. Make a table Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital. Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is…
Mallari and Chua are partners who share profits and losses in a ratio of 3:2, respectively. They have the following capital balances on September 30, 2018. Mallari, Capital P250,000 Cr. Chua, Capital P500,000 Cr. The partners agreed to admit Palatino to the partnership. Calculate the capital balances of each partner after the admission of Palatino, assuming that bonuses are recorded when appropriate for each of the following assumptions: Palatino invested P250,000 for a 20% interest in the partnership. Castro and Falceso are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances on September 30, 2019: Castro, Capital P100,000 Cr. Falceso, Capital P150,000 Cr. The partners agreed to admit Garachico to the partnership. Calculate the capital balances of each partner after the admission of Garachico, assuming that bonuses are recorded when appropriate for each of the following assumptions: Garachico…
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances: Herbert , Capital 25,000 Ireneo , Capital 15,000 At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits. Assumptions: A. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used. B. Joshua is admitted by investment and the adjusted capital after his admission is 90,000. Required: 1. Make a table Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital. Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is any) and Adjusted Capital 2. The journal entry upon the admission of Joshua. 3. Answer the following questions for each assumption: i. What will be the total capital of the…
Mallari and Chua are partners who share profits and losses in a ratio of 3:2, respectively. They have the following capital balances on September 30, 2018. Mallari, Capital P250,000 Cr. Chua, Capital P500,000 Cr. The partners agreed to admit Palatino to the partnership. Calculate the capital balances of each partner after the admission of Palatino, assuming that bonuses are recorded when appropriate for each of the following assumptions: 1. Palatino paid Mallari P250,000 for 50% of his interest 2. Palatino invested P250,000 for one-fourth interest in the partnership 3. Palatino invested P250,000 for a 30% interest in the partnership
Terence and Romeo are partners who share profits and losses 60% and 40%, respectively. Their capital accounts on July 1, 2017 were as follows: Terence - P 280,000; Romeo - P240,000. On this date, they agree to admit Arwind as a new partner. If Arwind purchased 25% of the respective capital and profits and losses of Terence and Romeo for P 150,000, how much is the share of Terence in the asset adjustment?
Diala and Tamer, partners in DT Company, have capital balances on January 1, 2016 of $72,000 and $48,000 respectively. The net income for the year is $86,000. The partnership income-sharing agreement indicates: 1. Annual Salaries of $24,000 for Diala and $16,000 for Tamer. 2. Interest of 10% on beginning capital balances for all partners. 3. Remaining income or loss to be shared in accordance with the ratio of the partners' original capital investments. Diala ratio= 72,000/(72,000+48,000)=0.6=60% Tamer=48,000/(72,000+48,000)=0.4=40% Instructions: (a) Prepare a schedule showing the distribution of net income for the partnership. (b)Prepare the journal entry to record the division of net income.
Partners Charlie and Delta share profits in the ratio of 6:4 respectively. On December 31, 2018 their respective capital balances were Charlie, P120,000 and Delta, P100,000. On that date Mae was admitted as partner with a one-third interest in capital and profits for an investment of P80,000. The new partnership began in 2019 with total capital of P300,000. Immediately after Mae’s admission, Charlie’s capital should be: a.P160,000 b.P108,000 c.P120,000 d.P100,000
Bimbim and Queen are partners who share profits and losses in a ratio of 3:2, respectively, and have the following capital balances on Dec. 31, 2020: Bimbim Capital, P2,000,000 Cr. And Queen Capital, P1,500,000 Cr. Assume that the partners agreed to let Gian into the partnership by investing P1,000,000 for a 1/4 interest. Gian’s capital balance will be _______
The partners Macopa, Sineguelas and Ashitaba have capital balances of P300,000, P450,000 and P200,000 respectively, while profit and loss was divided in the ratio 4:4:2. On December 1, 2017, Macopa announced his intention to leave the partnership at the end of the year. During the year the partnership gained a Net Income of P250,000 which was distributed as follows: 5% interest on their individual capital, salaries of P6,000 to Partners Sineguelas and Ashitaba, 4% Bonus on Net income after salaries and interest on capital was allowed to partner Macopa. Instruction: 1) Compute for the distribution of Net Income at the end of the year. 2) Give the entry to record the withdrawal of Macopaat the end of the year assuming a) Macopa cash settlement was P20,000 less than her capital interest and the bonus method was used. b) Macopa's cash settlement was P10,000 more than her capital interest and the asset revaluation method was used c) Macopa's cash settlement was equal to her capital…