.) 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
1.) On December 31, 2018, the unadjusted Statement of Financial Position of LAV
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
• 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
2.) 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
3.) Partners Kitty and Puppy, who share equally in profits and losses, have the following balance sheet as of December 31 of the current year.
Cash 120,000 Payables 172,000
Receivables 100,000 Accum Dept’n. 8,000
Inventory 140,000 Kitty, Capital 140,000
PPE 80,000 Puppy, Capital 120,000
Total 440,000 Total 440,000
They agreed to incorporate their partnership, with the new corporation absorbing the net assets after the following adjustments: provision of allowance for
How many total number of shares that were issued to the partners?
A. 260,000 C. 2,670
B. 267,000 D. 2,600
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