Reference no: EM133049031

Question - Q1. Gina, Nadia at Jack are partners of 58th Street Partnership. Their capital and loan balances were as follows:

Capital Loan

Gina 120,000 10,000 dr

Nadia 130,000 10,000 cr

Jack 250,000 -

Treat the following cases as independent from each other.

The partners decided to admit Kami who will invest sufficient cash to have 25% interest in the firm. Prior to his admission, it was determined that the inventories is understated by 10,000 and that the accounts payable is overstated by 5,000. What is the amount of cash to be invested by Kami assuming that the capital balance of Gina immediately after admission is 125,000?

a. 170,555 c.172,222

b. 173,889 d. 183,889

Q2. Sila will be admitted by investing sufficient cash to have 25% interest in the firm. The land was understated by 100,000 prior to his admission. The capital balance of Jack after admission would be 274,000. What is the amount of cash to be invested by Sila?

a. 113,333 c. 146,667

b. 186,667 d. 226,667

Q3. Sino will be admitted by acquiring 40% of Jack's capital for 120,000. His capital credit is equal to his payment. What is the amount of revaluation recognized prior to his admission?

a. 50,000 c. 100,000

b. 125,000 d. 200,000

Q4. Jack retires from the partnership and received 265,000 as settlement price under bonus method. What is the balance of total partner's equity immediately after the retirement of Jack?

a. 235,000 c. 245,000

b. 250,000 d. 255,000

Q5. Jack retires from the partnership and received a specific amount as settlement price. The total partners' capital immediately after the retirement is 280,000. Prior to retirement, it was determined that the equipment of the partnership is understated by 10,000. What is the amount of settlement price received by Jack?

a.230,000 c. 240,000

b.264,000 d. 288,000