A, B and C are partners with the following P/L ratio and capital balances: A (60%) P100,000; B(30%) P60,000; and C (10%) P20,000. Case 1: D purchases one-half of A’s capital interest for P70,000. Provide the journal entry under the book value method. Case 2: D purchases 20% interest in the partnership from A, B and C for P60,000. Provide the journal entry under the book value method and determine the capital balances of the partners after D’s admission. Case 3: D invests P70,000 cash for a 20% interest in the partnership’s net assets and profits. Provide the journal entry and determine the capital balances and P/L ratio of the partners after D’s admission.
A, B and C are partners with the following P/L ratio and capital balances: A (60%) P100,000; B(30%) P60,000; and C (10%) P20,000. Case 1: D purchases one-half of A’s capital interest for P70,000. Provide the journal entry under the book value method. Case 2: D purchases 20% interest in the partnership from A, B and C for P60,000. Provide the journal entry under the book value method and determine the capital balances of the partners after D’s admission. Case 3: D invests P70,000 cash for a 20% interest in the partnership’s net assets and profits. Provide the journal entry and determine the capital balances and P/L ratio of the partners after D’s admission.
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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A, B and C are partners with the following P/L ratio and capital balances: A (60%) P100,000; B(30%) P60,000; and C (10%) P20,000.
Case 1: D purchases one-half of A’s capital interest for P70,000. Provide the
Case 2: D purchases 20% interest in the partnership from A, B and C for P60,000. Provide the journal entry under the book value method and determine the capital balances of the partners after D’s admission.
Case 3: D invests P70,000 cash for a 20% interest in the partnership’s net assets and profits. Provide the journal entry and determine the capital balances and P/L ratio of the partners after D’s admission.
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