Reference no: EM132998071
Question - A, C and T are partners in ACT Partnership. On June 1 ,2019, I and V were admitted to the partnership by paying 50,000 each so that I and V will both have 10% interest each in the partnership as well as in the share in the profits and losses. From January 1, 2019 to December 31, 2019, the partnership business earned a profit of P 15,000.
The partner's capital balance as of January 1,2019 are as follows: A.P/L ratio A,Capital - 150,000 30% C, Capital - 200,000 50% T, Capital - 120,000 20%
The partner's will retain their profit and loss ratio even after admission of I and V.
1. What are the balances of the capital accounts of A, C,T,I and V after the admission of I and V?
2. What are the balances of the capital account of A, C, T,I and V on December 31,2019?
3. Prepare the entries regarding the admission of I and V to the partnership.
4. What are the balance of of the capital accounts of A, C,T,I and V after the admission of I and V assuming I and V paid 50,000 each because the inventories are not fairly valued?
5. What are the balances of the capital account of A, C, T,I and V on December 31,2019 under the assumption in no. 4?
B. On January 1, 2019, Ben and Len have capital balances of P 3,000,000 and P 2,750,000, respectively. On this day, they decided to admit Ken by making him contribute his land worth P 1,500,000 and cash of P 175,000 for a 25% interest in the partnership. Profit and loss ratio of Ben and Len is 60:40.
During 2019, the partnership incurred a net income of P 180,000. On January 1, 2020, the partners agreed to admit Jen for a 20% interest in the partnership by making her pay 1,500,000 because on this date the land of the partnership is not fairly valued. The partnership incurred a loss of P 50,000 for year 2020 and on June 1, 2020, Ben invested an additional amount of cash of P 45,000.
On December 31, 2020, Len decided to retire from the partnership and the remaining partners agreed to pay her an amount equal to 120% of her capital balance at the time of her retirement from the partnership
6. What are the balances of the capital accounts of Ben and Len after the admission of Ken?
7. Prepare the entries regarding the admission of Ken to the partnership.
8. What are the balances of the capital accounts of Ben, Len & Ken on December 31, 2019?
9. What are the balances of the capital accounts of Ben, Len, Ken and Jen after the admission of Jen to the partnership?
10. Prepare the entries regarding the admission of Jen to the partnership.
11. What are the balances of the capital accounts of Ben, Ken and Jen after retirement of Len on December 31, 2020?
12. Prepare the entries regarding the retirement of Len from the partnership.
C. The capital balances of partners in ABC Partnership on July 1, 2019 before closing of net income are as follows: A, capital ( 20%) - P 600,000 ; B, Capital ( 30%)- P 1,000,000; C, Capital ( 50%) - P 400,000. The partnership reported profit of P 3,600,000 for the six months ended June 30, 2019. On July 1, 2019, C withdrew from the partnership when he was bought -out by his co-partners for P 2,480,000 cash. The net assets of the firm as of this date approximate their fair values
13. The journal entry in the partnership books to record the withdrawal of C includes a debit to C's capital of how much?
14. How much is the capital balance of partner A after withdrawal of C?
15. Assuming the assets are not fairly valued, how much is the total partnership capital after withdrawal of C?