What is the capital balance of the remaining partners

Assignment Help Accounting Basics

Reference no: EM132668786

Problem 1: PV, BK and TF were partners in Omaha Partnership. Their profit ratio is 50%, 30%, 20%, while their original capital interest ratio is 4:4:2. On July 1, 2014, JP was admitted by the partnership for 20% interest in capital and 25% in profits by contributing P87,500 cash, and the old partners agree to bring their interest to their original capital and profit interest sharing ratio. JP is the recipient of the transfer of capital of P280,000 from the existing partners. The partnership had net income of P210,000 before admission of JP and the partners agree to revalue its overvalued equipment by P35,000. Capital balance of BK increased by P10,500 as a result of the admission of JP, while the capital balance of TF at the start of the year is P700,000. What is the capital balance of PV at the start of the year?

Problem 2: On December 30, 2010, the balance sheet of Danger Co. has the following balances: Total assets P450,000: Willie loan P25,000; Willie capital P103,750; Manny capital P96,250 and Loren capital P225,000. The partners share profits and losses in the ratio of 25% to Willie, 25% to Manny, and 50% to Loren. It was agreed among the partners that Willie retires from the partnership and the partnership assets be adjusted to their fair values of P510,000 as of December 31, 2010. The partnership also suffered net loss of P150,000. The partnership would pay Willie P108,500 cash for his total interest in the partnership.

What is the capital balance of the remaining partners after the retirement of Willie under the:

a. Bonus method?

b. Partial revaluation method?

c. Total revaluation method?

Reference no: EM132668786

Questions Cloud

What amount should the gain from the sale of the building : What amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal)

Advantages and disadvantage of a cloud solution : What are the main advantages and disadvantage of a cloud solution compared with an on-premise one?

Analyzing financial records of the business : Say that you are analyzing the financial records of the business you have been thinking about buying.

Explain the ethical problem in the case of liona : Explain the ethical problem in the case of Liona. Liona's role includes managing the business affairs of the firm, and she is very worried about the amount

What is the capital balance of the remaining partners : What is the capital balance of the remaining partners after the retirement of Willie under the Partial revaluation method

Relative importance of risks to the business : Prepare a briefing paper which summarizes the main risks facing the business at present, and the relative importance of these risks to the business

Strategic challenges in the future : Discuss how the organization will change while meeting its strategic challenges in the future.

Identify significant events that cast significant doubt : What are the auditor's responsibilities for 'going concern assumptions''? Identify significant events that cast significant doubt on SS's ability

What will a share of stock sell for today : Bluenotes Inc. just paid a dividend of $2.00 per share. If the required return on Holyrood stock is 17 percent, what will a share of stock sell for today

User Account

All Pages