Answer in Chapter 1 of Advanced Accounting by Guerrero

2148 Words Oct 6th, 2013 9 Pages
Partnership – Basic Considerations and Formation 1

CHAPTER 1

MULTIPLE CHOICE ANSWERS AND SOLUTIONS

1-1: a
Jose's capital should be credited for the market value of the computer contributed by him. 1-2: b (40,000 + 80,000)  2/3 = 180,000 x 1/3 = 60,000. 1-2: c

1-3: a Cash P100,000 Land 300,000 Mortgage payable ( 50,000) Net assets (Julio, capital) P350,000

1-4: b Total Capital (P300,000/60%) P500,000 Perla's interest ______40% Perla's capital P200,000 Less: Non-cash asset contributed at market value Land P 70,000 Building 90,000 Mortgage Payable ( 40,000) _120,000 Cash contribution P 80,000

1-5: d - Zero, because under the bonus method, a transfer of capital is only
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⅓ Mendez's capital P 82,950 Less Merchandise contributed ­­­ __50,000 Cash to be invested by Mendez P 32,950

Total Capital: Adjusted capital of Lopez P165,900 Contributed capital of Mendez __82,950 Total capital P248,850 1-17: d Moran, capital (40%) Cash P 15,000 Furniture and Fixtures _100,000 P115,000 Divide by Moran's P & L share percentage ______40% Total partnership capital P287,500 Multiply by Nakar's P & L share percentage ______60% Required capital of credit of Nakar: P172,500 Contributed capital of Nakar: Merchandise inventory P 45,000 Land 15,000 Building __65,000 Total assets P125,000 Less Liabilities __30,000 P 95,000 Required cash investment by Nakar P 77,500

1-18: c Garcia's adjusted capital (see schedule 1) P40,500 Divide by Garcia's P & L share percentage ­­­______40% Total partnership capital P101,250 Flores' P & L share percentage ______60% Flores' capital credit P 60,750 Flores' contributed capital (see schedule 2) __43,500 Additional cash to be invested by Flores P 17,250
Partnership – Basic Considerations and Formation 5

Schedule 1: Garcia, capital: Unadjusted balance P 49,500 Adjustments: Accumulated depreciation ( 4,500) Allowance for doubtful account ( 4,500) Adjusted balance P 40,500

Schedule 2: Flores capital: Unadjusted balance P 57,000 Adjustments:

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