Reference no: EM132992220
Question - May, Two, and Low, sharing profits and losses in the ratio of 50:30:20, have capital credit balances of P400,000; P300,000 and P200,000, respectively. They decided to admit Nose as a new partner for a 30% interest in the partnership upon Nose's investment of an amount equal to five-sixths of his capital credit with no asset adjustment to be recognized.
1. Immediately after the admission of Nose, how much will be the capital credit balance of Two?
A. 300,000 C. 270,000
B. 282,000 D. 250,000
2. Nali contributed P24,000 and To contributed P48,000 to form a partnership and they agreed to share profits in the ratio of their original capital contributions. During the first year of operations, they made a profit of P16,290; Nali withdrew P5,050 and Toh P8,000. At the start of the following year, they agreed to admit Me into the partnership. Me was to receive a one fourth interest in the capital and profits upon payment of P30,000 to Nali and Tohh, whose capital accounts were to be reduced by transfers of Me's capital account of amounts sufficient to bring them back to their original capital ratio.
How much of the P30,000 paid by Me be given to Nali
A. 10,000 C. 5,570
B. 9,300 D. 3,730
3. Erik, John and Nate were partners with capital balances on January 2, 2020 of P70,000, P84,000 and P56,000, respectively. Their profit and loss sharing ratio is 3:5:2. On July 1, 2020, Erik retires from the partnership. On the date of retirement the partnership net profit from operations is P48,000. The partners agreed further to pay Erik P76,560 in settlement of his interest.
How much will be the capital of John after the retirement of Erik?
A. 113,600 C. 94,933
B. 108,000 D. 84,000
4. On December 31, 2018, the unadjusted Statement of Financial Position of LAV Partnership shows the following data with profit and loss sharing agreement of 2:3:5.
Total Assets 100,000 Total Liabilities 40,000
Lorna 10,000
Amy 20,000
Veronica 30,000
On December 31, 2018, Lorna decided to retire from the partnership. However, before the distribution of cash to Lorna, the following data errors were discovered during the pre-retirement audit:
During the year, machinery was over depreciated by P15,000.
The net income for the year is overstated by P5,000.
After the adjustment, Lorna received P15,000 for her capital interest.
What is the capital of Amy after Lorna's retirement?
A. 27,500 C. 21,875
B. 23,000 D. 20,000
5. The total of the partners', capital accounts was P110,000 before the recognition of partnership asset revaluation in preparation for the final withdrawal of a partner whose profit or loss sharing is 2/10. He was paid P28,000 by the firm in final settlement for his interest. The remaining partners' capital accounts, excluding their share of the assets revaluation, totaled P90,000 after his withdrawal. What was the total asset revaluation that the firm agreed upon?
A. 40,000 C. 20,000
B. 28,000 D. 8,000