Reference no: EM132868745
Question - Partnership operation - The partnership agreement of X, Y and Z syipulates the following:
a. Partners Y and Z shall receive annual salaries of P23,000 and P12,000 respectively.
b. A bonus of 15% of profit after salaries but before deduction of bonus shall be givem to partner X the managing partner.
c. Each partner shall receive 11% interest on average capital investments.
d. any remaining profit or loss shall be shared as follows: 30% to X, and 35% each to Y and Z. The average capital investment of the partners during the year are as follows: X - P125,000 ; Y - 78,000 and Z- 101,000.
Case#1: The partnership earns profit of 125,000.
Case#2: The partnership earns profit of 9,000.
Case#3: The partnership earns loss of 19,000.
For items 1-3 refer to case #1
1. How much is X's share in the profit/loss?
2. How much is Y's share in the profit/loss?
3. How much is Z's share in the profit/loss?
For items 4-6, refer to case #2
4. How much is X's share in the profit/loss?
5. How much is Y's share in the profit/loss?
6. How much is Z's share in the profit/loss?
For Items 7-9, refer to case #3.
7. How much is the X's profit/loss?
8. How much is the Y's profit/loss?
9. How much is the Z's profit/loss?
10. Under the case #1, How much is the bonus given to X?
11. Under the Case #2, How much is the bonus given to X?
12. Under the Case #3, How much is the bonus given to X?
13. Under Case #1, How much is X's interest on the average capital?
14. Under Case #2, how much is Y's interest on the average capital?
15. Under Case #3, how much is Z's interest on the average capital?
PARTNERSHIP DISSOLUTION - M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below:
Cash 28,000
Account receivable 118,000
Inventory 187,000
Total Assets 333,000
Accounts Payable 65,000
M, Capital (70%) 172,000
N, Capital (30%) 96,000
Total Liabilities & Equity 333,000
The following adjustment are determined:
a. The revoverable amount of the account receivable is P117,401.
b. A P30,000 recovery of a previous write-down on the inventory should be recognized.
c. Prepared assets of P 4,600 and accrued liabilities of P6,000 should be recognized.
Case#1: O acquires half of N's interest for P120,000.
Case#2: O invests P 81,250 cash to the partnership in exchange for a 25% interest.
Case#2: Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired.
Case#2: Scenario B: O's capital account is credited for P 100,000.
For items 16-18, refer to Case #1
16. How much is the balance of M's capital account after O's admission?
17. How much is the balance of N's capital account after O's admission?
18. What is the profit or loss sharing ratio of the partners after O's admission?
19. Under Case #2, Scenario A: how much is the balance of M's capital account after O's admission?
20. Under Case #2, Scenario B: how much is the balance of N's capital account after O's admission?