Partnership dissolution. Please see question in image. 1. Carrot joins the partnership of Apple and Banana. The partnership's statement of financial position beforeCarrot's admission is as followsCashAccounts receivableInventoryEquipmentTotal Assets30, 000140, 000200, 000500, 000| 870, 000Accounts PayableApple, Capital (60%)Banana, Capital (40%)80, 000515, 000275, 000Total liab & Equity870, 000The following adjustments are determined:A. The recoverable amount of the accounts receivable is P120, 000.B. The inventory has a net realizable value of P160, 000.C. The equipment has a fair value of P450, 000.D. Unrecorded liabilities amount to P20, 000.Solutions:Case 1: Purchase of interest from one partnerCarrot acquires half of Banana's capital interest for P800, 000.Requirements: Provide journal entry and determine the capital balances and P/L ratio of the partnersafter Carrot's admission.Case 1:Carrying amts.30,000Fair valuesIncrease (Decrease)CashAccounts receivableInventoryEquipmentAccounts payableAccrued liabilitiesNet assets30,000140,000200,000500,000(80,000)120,000160,000450,000(20,000)(40,000)(50,000)(80,000)(20.000)660,000(20,000)(130,000)790,000Apple 60%Banana 40%CarrotTotalCapital, beg.515,000275,000790,000Revaluation decrease(78,000)(52,000)(130,000)Acjiusted, before admission437,000223,000660,000Sale from Banana to CarrotCapital after admission(111,500)111,500437,000111,500111,500660,000DateBanana, Capital (223,00 x 1/2)Carrot, Capital (223,00 x 1/2)111,500111,500Admission ofPartnerBefore admissionCarrotAfter admission60%60%AppleBanana40%-20%20%Carrot20%20%100%100%

Partnership dissolution takes place when there is a death of a partner or admission of a new…

1. Carrot joins the partnership of Apple and Banana. The partnership's statement of financial position before Carrot's admission is as follows Cash Accounts receivable |Inventory Equipment Total Assets 30, 000 140, 000 | 200, 000 500, 000 870, 000 Accounts Payable | Apple, Capital (60%) Banana, Capital (40%) 80, 000 515, 000 275, 000 | Total liab & Equity 870, 000 The following adjustments are determined: A. The recoverable amount of the accounts receivable is P120, 000. B. The inventory has a net realizable value of P160, 000. C. The equipment has a fair value of P450, 000. D. Unrecorded liabilities amount to P20, 000. Solutions: Case 1: Purchase of interest from one partner Carrot acquires half of Banana's capital interest for P800, 000. Requirements: Provide journal entry and determine tho capital balances and P/L ratio of the partners after Carrot's admission.

1. Carrot joins the partnership of Apple and Banana. The partnership's statement of financial position before Carrot's admission is as follows Cash Accounts receivable |Inventory Equipment Total Assets 30, 000 140, 000 | 200, 000 500, 000 870, 000 Accounts Payable | Apple, Capital (60%) Banana, Capital (40%) 80, 000 515, 000 275, 000 | Total liab & Equity 870, 000 The following adjustments are determined: A. The recoverable amount of the accounts receivable is P120, 000. B. The inventory has a net realizable value of P160, 000. C. The equipment has a fair value of P450, 000. D. Unrecorded liabilities amount to P20, 000. Solutions: Case 1: Purchase of interest from one partner Carrot acquires half of Banana's capital interest for P800, 000. Requirements: Provide journal entry and determine tho capital balances and P/L ratio of the partners after Carrot's admission.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 14E

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