Reference no: EM132873502

Partnership Dissolution Questions -

Q1. On December 31, 20x1, John joins the partnership of Andrew and jess by purchasing 10% of Andrew's capital for P70,000. Andrew and Jess have capital balances of P 400,000 and P 300,000 respectively, as of December 31, 20x1. REQUIRED: Record John's admission in the partnership.

Q2. On June 1, 20x1 , John was admitted in the partnership of Andrew and Jess by investing P 100,000 cash. Consequently, John bacame a new partner in the partnership. The partners agreed to credit John's capital account with an amount equal to his investment. Andrew and Jess have capital balances of P 300,000 and P 150,000 respectively as of Kune 1, 20x1, with a P/L ration of 7:3. REQUIRED: Record in Joh'ns admission in the partnership.

Q3. John withdraws from the partnership on september 30, 20x1. He decides to sell his interest to the remaining partners P 900,000. The following are the capital balances of the partners as of September 30, 20x1:

PARTNER CAPITAL BAL.

John, Capital (30%) 300,000

Andrew, Capital (30%) 200,000

Jess, Capital (40%) 190,000

Total P690,000

The partnership's profit for the third quarter ending September 30, 20x1 is P 300,000.

REQUIRED -

a. Compute the adjusted balances for each of the partners

b. Provide the journal entries to record the necessary adjustment (the share in the profit and the transfer of capital) in the partnership's capital structure as a result of John's withdrawal.

Q4. On June 30, 20x1, John decides to pull out his investment from the partnership and agreed to receive a settlement price of P 400,000 from the partnership. The adjusted (reflecting the share in P/L capital balances of the partners as of June 30, 20x1 are as follows:

John (20%): P 450,000

Andrew (20%): P240,000

Jess (60,000): P310,000

REQUIRED: Provide the journal entries to record the necessary adjustment in the partnership's capital structure due to John's withdrawal.

MULTIPLE CHOICES Questions -

1. A person may become a partner in a partnership by all of the following methods, EXCEPT:

a. Investing in the partnership with a bonus to a new partner

b. Making a loan to the partnership

c. Investing in the partnership with a bonus to the old partners

d. purchasing a partner's interest

2. Which of the folowing DOES NOT result in the dissolution of a partnership?

a. Marriage of a partner

b. Withdrawal of a partner

c. admission of dissolution

d. Death of a partner

3. A partner may be admitted into a partnership by any of the following, EXCEPT:

a. Investing in the partnership

b. Purchasing preference shares of partnership

c. Purchasing a partner's interest

d. both a and c