Reference no: EM132823299

Questions -

Q1. Ham and Egg are partners sharing profits and losses in the ratio of 60% and 40% respectively. Their capital balances are:

Ham 90,000

Egg 45,000

They agreed to admit Cheese into the partnership.

Required: Compute for the Capital balance of each partner after the admission of Cheese under the following independent cases:

I. Cheese purchase 1/3 interest from the old partners. Cheese pays the partners 48,750.

II. Cheese invests 40,000 for a 1/4 interest in a new capital of 180,000.

III. Cheese invests 75,000 for a 1/3 interest and is credited for the same amount.

IV. Cheese invests 65,000 for a 1/4 interest in a new capital of 210,000.

V. Cheese invests 56,250 for 1/4 interest in the partnership.

VI. Cheese invests 37,500 for a 1/4 interest in an agreed capital of 150,000. The partner's capital balances should be made to equal the new profit and loss ratio.

Q2. The Hagen-Baden Partnership has total equity of 380,000, which is made up of Hagen, Capital 3,000,000 and Baden, Capital 80,000. The partners share net income and loss in a ratio of 75% to Hagen and 25% to Baden. On July 1, Megan is admitted to the partnership and given a 20% interest in equity and in gains and losses.

Required: Compute for the Capital balance of each partner after the admission of Megan under the following independent cash investment of Megan of:

I. 95,000

II. 115,000

III. 55,000

Q3. Helen, Eva and Bong have been partners sharing net income and losses in a 5:3:2 ratio. On October 31, the date Bong retires from the partnership, the equities of the partners are Helen, 104,000; Eva, 160,000 and Bong , 40,000.

Required: Compute for the Capital balances of the remaining partners after the retirement of Bong with the following cash payment to Bong for his equity:

I. 40,000

II. 48,000

III. 36,000