1. Assume Joshua is admitted by purchase of 40% each of the original partners interest: Calculate the amount credited to the capital of Joshua and amount received by Herbert and Ireneo for their respective partnerhip interest transferred to Joshua. 2. Assume Joshua is admitted by investing the P43,875 to the partnership: Calculate the partners capital account of Herbert, Ireneo, and Joshua after the admission, and New Total Partners equity using: a. Bonus Method b. Revaluation Method
1. Assume Joshua is admitted by purchase of 40% each of the original partners interest: Calculate the amount credited to the capital of Joshua and amount received by Herbert and Ireneo for their respective partnerhip interest transferred to Joshua. 2. Assume Joshua is admitted by investing the P43,875 to the partnership: Calculate the partners capital account of Herbert, Ireneo, and Joshua after the admission, and New Total Partners equity using: a. Bonus Method b. Revaluation Method
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Question
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60% and 40%, respectively. The partnership balance sheet at August 30, 2016 follows:
Cash 12,150
Other Assets 119,150
Accounts Payable 13,500
Herbert, capital 86,850
Ireneo, capital 31,500
At this date, Joshua was admitted as a partner for a consideration of P43,875 cash for a 40% interest in capital and in profits.
Required:
1. Assume Joshua is admitted by purchase of 40% each of the original partners interest:
Calculate the amount credited to the capital of Joshua and amount received by Herbert and Ireneo for their respective partnerhip interest transferred to Joshua.
2. Assume Joshua is admitted by investing the P43,875 to the partnership:
Calculate the partners capital account of Herbert, Ireneo, and Joshua after the admission, and New Total Partners equity using:
a. Bonus Method
b. Revaluation Method
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