Apple, Blandy, Cherry, and Debbie are partners sharing profits and losses in the ratio of 40%, 30%, 15%, and 15%. Their capital accounts are P380,000, P560,000, P442,000, and P418,000, respectively. Emma acquires a one-fifth interest in the business by paying the partners a total of P380,000. 1.Determine the capital balances after the admission of Emma. 2.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma. 3.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma and all partners are to have equal interests in both capital and profits.
Apple, Blandy, Cherry, and Debbie are partners sharing profits and losses in the ratio of 40%, 30%, 15%, and 15%. Their capital accounts are P380,000, P560,000, P442,000, and P418,000, respectively. Emma acquires a one-fifth interest in the business by paying the partners a total of P380,000. 1.Determine the capital balances after the admission of Emma. 2.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma. 3.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma and all partners are to have equal interests in both capital and profits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Apple, Blandy, Cherry, and Debbie are partners sharing profits and losses in the ratio of 40%, 30%, 15%, and 15%. Their capital accounts are P380,000, P560,000, P442,000, and P418,000, respectively. Emma acquires a one-fifth interest in the business by paying the partners a total of P380,000.
1.Determine the capital balances after the admission of Emma.
2.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma.
3.Determine the cash distribution to partners assuming that assets are to be revalued prior to the admission of Emma and all partners are to have equal interests in both capital and profits.
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