Reference no: EM133042407

Question - Partners E, F, G have capital balances of P120,000, P155,000, and P115,000 respectively. The partnership generated net loss of P140,000 during the year. They share profits and losses 2:5:1 respectively. Due to disagreement partner F wants out of the partnership. Before retirement, the value of their inventory increased from P85,000 to P97,000. The partners decided to pay partner F P70,000 upon retirement.

1. How much is the capital balances of partners E and G after the retirement of F?

a. 91,333 and 100,667 c. 87,000 and 98,500

b. 84,667 and 97,333 d. Answer not given

2. Assume that another asset, an equipment, is overhauled, how much is the overvaluation of the equipment and the capital balances of partners E and G after retirement of partner F?

a. 5,000 and 84,667 and 97,333 c. 5,000 and 91,333 and 100,667

b. 8,000 and 86,000 and 98,000 d. Answer not given

3. Capital Balances of partners Q, R and S are the following before liquidation: 87,000, 95,500 and 106,250 respectively. The partnership has a loan from partner Q in the amount of 8,000; loan to partner R in the amount of 4,500; advances to partner S in the amount of 6,500. The partners' profit and loss ratio is 25:40:35 respectively. If in the first instalment the total cash paid to partners is 57,000, if partner Q received 20,000 in the first instalment and partner S received 12,396 in the second instalment, how much is received by partner Q as of the second instalment and how much is the total cash paid to partners in the second instalment?

a. 12,604 and 25,000 c. 23,750 and 30,000

b. 32,604 and 25,000 d. answer not given