Admission by Investment of Assets Resulta and Magpantay are partners sharing profits on a 60:40 ratio. A statement of financial position prepared for the partners on April 1, 2022 follows: Cash Accounts Receivable Inventories Equipment Less: Accumulated Depreciation Total Assets P700,000 450,000 P 480,000 920,000 1,650,000 250,000 P3,300,000 Accounts Payable Resulta, Capital Magpantay, Capital Total Liabilities & Capital P 890,000 1,330,000 1,080,000 eris .C P3,300,000 On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are summarized below: Assets and liabilities are to be restated as follows: a. An allowance for possible uncollectibles of P45,000 is to be established. b. Inventories are to be restated at their present replacement value of P1,700,000. c. Accrued expenses of P40,000 are to be recognized. Resulta, Magpantay and Tria will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of the new partnership are to be in the stated ratio, with Resulta and Magpantay making cash settlement between themselves outside of the partnership to adjust their capitals, and Tria investing cash in the partnership for his interest. Determine how much cash is to be invested by Tria.
Admission by Investment of Assets Resulta and Magpantay are partners sharing profits on a 60:40 ratio. A statement of financial position prepared for the partners on April 1, 2022 follows: Cash Accounts Receivable Inventories Equipment Less: Accumulated Depreciation Total Assets P700,000 450,000 P 480,000 920,000 1,650,000 250,000 P3,300,000 Accounts Payable Resulta, Capital Magpantay, Capital Total Liabilities & Capital P 890,000 1,330,000 1,080,000 eris .C P3,300,000 On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are summarized below: Assets and liabilities are to be restated as follows: a. An allowance for possible uncollectibles of P45,000 is to be established. b. Inventories are to be restated at their present replacement value of P1,700,000. c. Accrued expenses of P40,000 are to be recognized. Resulta, Magpantay and Tria will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of the new partnership are to be in the stated ratio, with Resulta and Magpantay making cash settlement between themselves outside of the partnership to adjust their capitals, and Tria investing cash in the partnership for his interest. Determine how much cash is to be invested by Tria.
SWFT Essntl Tax Individ/Bus Entities 2020
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Author:Nellen
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Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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Transcribed Image Text:Admission by Investment of Assets
Resulta and Magpantay are partners sharing profits on a 60:40 ratio. A statement of
financial position prepared for the partners on April 1, 2022 follows:
Cash
Accounts Receivable
Inventories
Equipment
Less: Accumulated
Depreciation
Total Assets
P700,000
450,000
P 480,000
920,000
1,650,000
Tanah 30
250,000
P3,300,000
Accounts Payable
Resulta, Capital
Magpantay, Capital
Total Liabilities & Capital
P 890,000
1,330,000
1,080,000
.C
P3,300,000
On this date, the partners agreed to admit Tria as a partner. The terms of the
agreement are summarized below:
Assets and liabilities are to be restated as follows:
a. An allowance for possible uncollectibles of P45,000 is to be established.
b. Inventories are to be restated at their present replacement value of P1,700,000.
c. Accrued expenses of P40,000 are to be recognized.
Resulta, Magpantay and Tria will divide profits in the ratio of 5:3:2. Capital balances of
the partners after the formation of the new partnership are to be in the stated ratio,
with Resulta and Magpantay making cash settlement between themselves outside of
the partnership to adjust their capitals, and Tria investing cash in the partnership for his
interest. Determine how much cash is to be invested by Tria.
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