Reference no: EM132808129

Problem 1: Perez, Reyes, and Suarez were partners with capital balances on January 1, 2015 of P100,000, P150,000, and P200,000, respectively. Their profit and loss ratio is 5:3:2. On July 1, 2015, Perez retires from the partnership. On that date of retirement, the partnership net income is P140,000 and the partners agreed that inventories are to be revalued at P70,000 from its original cost of P50,000. The partners agreed further to pay Perez P195,000 in settlement of his interest. What are the capital balances of Reyes and Suarez after the retirement of Perez?

A. P 189,000; P 226,000

B. P 198,000; P 232,000

C. P 207,000; P 238,000

D. P 220,000; P 226,000

Problem 2: X, Y, and Z are partners dividing profits and losses in the ratio of 5:3:2 and whose capital balances as of January 1, 2013 were P600,000, P400,000, and P300,000, respectively. Z is retiring from the partnership as of July 1, 2013. The partnership agreement provides that the books of accounts need not be closed upon the retirement of a partner. Net income is to be considered as having been realized proportionately during the period. The partnership estimated net income for 2013, P480,000. Prior to her retirement, Z paid personal expenses of P15,000 from the partnership funds. The partnership, on the other hand, collected P50,000 from personal receivable of Z and deposited the same for the account of the partnership. How much is the total amount due to Z as of the date of retirement?

A. P348,000

B. P359,000

C. P383,000

D. P431,000