Reference no: EM133178706
Questions -
Q1. MN and OP decided to form a partnership on June 01, 2020. The partnership will take over their assets as well as assume their liabilities. As of June 01, 2020, the net assets of MN and OP are P220,000 and P309,375 respectively. Liabilities of MN are 55% less than book value of its net assets while liabilities of OP are 40% more than the book value of its net assets. The partners agreed on a 25:75 profit and loss ratio. Furthermore, the partners arrived on the following agreements: MN's inventory is undervalued by P11,000. An allowance for doubtful accounts is to be set-up in the books of MN and OP at 10% of the accounts receivable balances (AR balances: MN, P27,500; OP, P41,250). Accrued salary of P20,250 was not recognized in OP's books.
What is the total asset of the partnership immediately after formation if partner's capital interest should be equal to their profit and loss ratio through withdrawal of excess cash investment by one of the partners?
Q2. Alma and Becca have just formed a partnership. Alma contributed cash of P176,400 and office equipment that cost P75,600. The equipment had been used in his sole proprietorship and had been 70% depreciated, the current value of the equipment is P50,400. Alma also contributed a note payable of P16,800 to be assumed by the partnership. Alma is to have a 30% interest in the partnership. Becca contributed P256,000 land at fair market value. Becca should make additional investment of:
Q3. On January 1, 2020, Tonie, Abbie and JM entered into articles of co-partnership for the operation of TAJ computer shop. Toni contributed investment property with assessed value of P1,700,000 subject to mortgage payable of P500,000 to be assumed by the partnership. Abbie contributed computer equipment with cost of P600,000 with accumulated depreciation of P200,000. The fair market value of the computer equipment is P300,000. On January 2, 2020, the partnership was able to sell the investment property for P2,000,000.
How much cash shall be contributed by JM if the articles of co-partnership provide that Toni will have 60% interest in the partnership?
Q4. On July 01, 2021, A, B, and C formed a business partnership to be operated as an advertising agency. A contributed P100,000 cash while B shall have capital credit of P60,000 upon receipt of bonus of P10,000 from A based on the provision in Articles of Co-Partnership. The terms of the agreement provide that A and B shall have a combined 40% capital interest in the newly formed partnership.
What is the capital contribution made by C to the partnership?