Reference no: EM132768132
Question - COMPREHENSIVE PROBLEM - On May 1, 2020, the business assets and liabilities of LONZO and BRANDON were as follows:
|
|
LONZO
|
BRANDON
|
|
Cash
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P28,000
|
P62,000
|
|
Receivables
|
200,000
|
600,000
|
|
Inventories
|
120,000
|
200,000
|
|
Land, buildings, and equipment
|
650,000
|
535,000
|
|
Other assets
|
2,000
|
3,000
|
|
Accounts payable
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(180,000)
|
(250,000)
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|
Notes payable
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(200,000)
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(350,000)
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LONZO and BRANDON agreed to form a partnership by contributing their net assets, subject to the following adjustments:
Receivables of P 20,000 in LONZO's books and P 40,000 in BRANDON's books are uncollectible
Inventories of P 6,000 and P 7,000 in the respective books of LONZO and BRANDON are worthless.
Other assets in both books are to be written off.
REQUIREMENTS -
1. Upon the partnership's formation, the respective capital of partners LONZO and BRANDON would be?
2. Under the Bonus Method, if the partner agreed to have a capital ratio of 40:60 for LONZO and BRANDON respectively, how much is the amount of bonus to or (from) LONZO?
3. Under the Bonus Method, if the partner agreed to have a capital ratio of 40:60 for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?
4. Under the Bonus Method, if the partner agreed to have a capital ratio of 60:40 for LONZO and BRANDON respectively and they further agreed to have a total capital of P 1,500,000, how much is the amount of bonus to or (from) LONZO?
5. Under the Bonus Method, if the partner agreed to have a capital ratio of 60:40 for LONZO and BRANDON respectively, and they further agreed to have a total capital of P 1,500,000, how much is the adjusted capital of LONZO?
6. If the partners agreed that LONZO should withdraw or invest in order to have a capital ratio of 40%, how much should be the amount of additional investment or withdrawal?
7. If the partners agreed that LONZO should withdraw or invest in order to have a capital ratio of 40%, how much is the adjusted capital of LONZO and BRANDON?
8. If the partner agreed to revalue assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of LONZO?
9. If the partner agreed to revalue assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?
10. If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of LONZO?
11. If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?