Reference no: EM133150942
Question - Admission by Investment of Assets - Mendez and Mercado are partners in 2M Partnership with capital balances of P550,000 and P350,000, respectively, they share in the income and loss in the ratio 1:3, respectively. The partners are considering the admission of Serrano.
Required - Compute the capital balance of each of the partners (old and new) after the admission of Serrano under each of the following independent assumptions.
a. Serrano invested P100,000 cash in the partnership for a one-tenth interest. The net assets of the partnership are fairly valued
1. How much is the capital balance of Mendez after the admission of Serrano?
2. How much is the capital balance of Manalo after the admission of Serrano?
3. How much is the capital credit of Serrano upon his admission to the partnership?
b. Serrano invested P140,000 cash in the partnership for a one-eight interest. Assets of the partnership are fairly valued except for equipment, which is undervalued by P80,000 Net assets of the partnership are to be revalued and Serrano is to be admitted
1. How much is the capital balance of Mendez after the admission of Serrano?
2. How much is the capital balance of Manalo after the admission of Serrano?
3. How much is the capital credit of Serrano upon his admission to the partnership?
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