Give the required entries on the partnership books

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Reference no: EM132704788

Question - Give the required entries on the partnership books to record the admission of Corrales under each of the following assumptions.

Support your answers with computations.

Carmen and Centeno are partners with capital balances of P160,000 and P80,000. They share profits 60%, 40%, respectively. The partners agree to admit Corrales as a member of the firm.

Assumption 1. Corrales purchases a 1/4 interest in the firm. One-fourth of each partner's capital is to be transferred to the new partner. Corrales pays the partners P60,000, which is divided between them in proportion to the equities given up.

Assumption 2. Corrales purchases a 1/3 interest in the firm. One-third of each partner's capital is to be transferred to the new partner. Corrales pays the partners P120,000, which is divided between them in proportion to the equities given up. Before Corrales admission, asset revaluation is undertaken and recorded on the firm books so that Corrales' 1/3 interest will be equal to the amount of his payment.

Assumption 3. Corrales invests P120,000 for a 1/4 interest in the firm. Asset revaluation is recorded on the firm books prior to the admission.

Assumption 4. Corrales invests P120,000 for a 50% interest in the firm. Carmen and Centeno transfer part of their capital to that of Corrales as a bonus.

Assumption 5. Corrales invests P160,000 in the firm. P40,000 is to be considered a bonus to partners Carmen and Centeno.

Assumption 6. Corrales invests P160,000 in the firm and allowed a bonus to Carmen and Centeno of P20,000 upon his admission.

Assumption 7. Corrales invests P100,000 for a 1/4 interest in the firm. The total firm capital after his admission is to be P340,000.

Assumption 8. Corrales invests P110,000 for a 1/4 interest in the firm. The total firm capital after his admission is to be P440,000.

Assumption 9. Corrales invests sufficient cash for a 1/5 interest.

Reference no: EM132704788

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