Reference no: EM132961718
Question - How is the admission of industrial partner be recorded in the book of partnership?
Case 1 - Mang and Ming agreed to form a partnership. The partnership agreement stipulates that Mang shall contribute a noncash assets with fair value of P1,000 while Ming shall contribute cash of P1,000. However, since Ming will be bringing in a special skill to the partnership, the partners agreed that Ming shall be entitled to a 70% interest in the partnership initial net assets and in subsequent partnership profits and losses. Are the following statements, true or false:
1. Mang's noncash asset contribution shall be debited at P300.
2. The net credit to Ming's capital account is P1,400.
Case 2 - Piw and Pie agreed to form a partnership. Piw contributed cash P200 while Pie will be contributing her expertise. The partnership agreement stipulates that Piw and Pie shall have equal interest in both the initial capital of the partnership and in subsequent partnership profits and losses. Are the following statements, true or false:
The cash contribution of Piw shall be debited for P200 but the net credits to Piw's capital account shall be P100.
Immediately after partnership formation, the balance of Pie's capital account in the partnership books is zero.
Case 3 - Raymundo Dolor and Julius Aleman formed a partnership with the following contributions:
R. Dolor contributed a parcel of land which costs his father P100,000. The land has a fair market value of P150,000 when the land was inherited by him 3 years ago and currently has a fair market value of P200,000 and cash of P50,000.
J. Aleman on the other hand contributed sufficient cash to 3/4 of Dolor's capitalization.
At what amount should land be valued in the partnership book?
At what amount should Aleman's capital account be credited?
Assuming that the land is sold for P220,000 a week after the formation, what amount should be recorded as Dolor's capital account balance during the partnership formation?
Case 4 - A and B formed a partnership. The partnership agreement stipulates the following:
A shall contribute noncash assets with carrying amount of P60,000 and fair valuee of P100,000.
B shall contribute cash of P200,000.
A and B shall have interests of 80% and 20%, respectively, on both the initial partnership capital and in subsequent partnership profits and losses.
No outside cash settlements shall be made between and among the partners.
Total partnership capital after the formation is?
The adjusted capital account of B after the formation is?
The entry to record the contribution of B?
Case 5 - On January 1, 2020, A, B and C organized ABC partnership wherein A contributed P2,000,000 for 20% interest in the partnership. B contributed P6,000,000 for a capital credit of P5,000,000. After closing the accounting book, B and C made drawings of P600,000 and P200,000, respectively. Their profit/loss agreement are presented below:
Quarterly salary of P40,000, P10,000 and P120,000 respectively
The remainder will be divided in the ratio of 1:5:4
On December 31, 2020, the capital balance of C is P3,200,000. What is the net income of the partnership for the year ended December 31, 2020?
What is the capital balance of B on December 31, 2020?
Case 6 - The partnership agreement of A and B provides for an equal sharing of partnership profits and losses among the partner. Furthermore, the agreement stipulates that A, the managing partner, shall receive a 10% bonus based on the partnership profit before deducting the bonus.
Are the following statements true of false? Correct the false statement(s).
If the partnership earns profits of P20 during the period, the share of A is P11.
If the partnership incurs loss P20 during the period, the share of A is P9.
Case 7 - A and B formed a partnership. The partnership agreement stipulates the following:
Annual salary allowances of P50 for A and P30 for B
Any remaining amount of profit or loss shall be divided equally
Are the following statements true of false? Correct the false statement(s).
During the period the partnership earned profit of P100 before salary allowances. The share of A in the partnership profit is computed as (100-50-30)x50%.
During the period the partnership incurred loss of P100 before salary allowance. The share of B in the partnership loss is computed as (100x50%).
The partnership agreement of Ey and Bee Partnership stipulates an allocation of a salary and a bonus to Ey and the remaining balance shall be divided equally. If the partnership earns profit of P1000 during the period, the share of Bee in the partnership profit may be computed as follows: (P1000-salary to Ey- bonus to Ey )/2.
Case 8 - The partnership agreement of A, B and C stipulates the following:
Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively.
A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner.
Each partner shall receive 10% interest on average capital investments.
Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C
The average capital investments of partners during the year are as follows:
A P100,000
B 60,000
C 120,000
Case 1: The partnership earns profit of P100,000. Compute for the respective shares of the partners on the partnership profit.
Case 2: The partnership earns profit of P10,000. Compute for the respective shares of the partners on the partnership profit.
Case 3: The partnership incurs loss of P20,000. Compute for the respective shares of the partners on the partnership loss.