Reference no: EM133034296

Question -

Q1. Moira admits Joni as a partner in the business. Balance sheet accounts of Moira just before the admission of July shows: Cash, P43,000, Accounts Receivable, P150,000, Merchandise Inventory, P170,000, and Accounts Payable, P52,000. It was agreed that for purposes of establishing Moira's interest, the following adjustments should be made:

-an allowance for doubtful accounts of 3% of accounts receivable is to be established

-merchandise inventory is to be increased by P25,000; and

-prepaid expenses of P7,600 and accrued liabilities of P4,800 are to be recognized.

Requirement - If Joni is to invest sufficient cash to obtain 2/5 interest in the partnership, what amount should she contribute to the new business?

Q2. Bruce, Parker, and May formed a partnership. Their capital balances showed the following:

Bruce, Capital - P252,000

Parker, Capital - P126,000

May, Capital - P42,000

Their profit and loss ratio are 6:3:1. The partners decide to sell 20 percent of their interest to Violet for a total payment of P120,000. Violet will pay the money directly to other partners.

Requirement - How much was the bonus debited or credited in partner Bruce's capital account?

Q3. John and Paul are partners who share profits and losses in the ratio of 3:2 respectively. John's salary is P180,000 and Paul's is P140,000. The partners are paid interest on their average capital balances where John received interest of P 30,000 and Paul, P 15,000. The profit and loss allocation is determined after deduction for the salary and interest payments.

Requirement - If John received P280,000 from partnership income, what was the total partnership income?