Reference no: EM132997024

Question - Camus and Cuenco are partners who have capital balances of P90,000.00 and P60,000.00 and who share profits 75% and 25% respectively. They agree to admit Cerda as a partner upon his payment of P90,000.00.

Instruction - Give the journal entries to record each of the following independent assumptions:

1. One-third of the capital balances of the old partners are transferred to the new partner, Camus and Cuenco dividing the cash between themselves.

2. One-third of the capital balances of the old partners are transferred to the new partner, Camus and Cuenco dividing the cash between themselves. However, before recording the admission of Cerda, asset revaluation is undertaken on the firm books so that Cerda's capital may be equal to the amount paid for the interest.

3. The cash is invested in the business and Cerda is credited with a ¼ interest in the firm, the bonus method being used in recording his investment.

4. The cash is invested in the business and Cerda is credited with the full amount of his investment which is to be 25% of the new firm capital.

5. The cash is invested in the business and Cerda is credited for P120,000.00 which includes a bonus from Camus and Cuenco.