Ballesteros is retiring from the partnership and the partners have agreed that "other assets" should be adjusted to their fair value of P1,950,000 at December 31, 2020. They further agree that Ballesteros will receive P793,000 cash for his partnership interest exclusive of the loan, which is to be paid in full, and that no goodwill implied by Ballesteros' payment will be recorded. After Ballesteros' retirement, the capital balances of Abellana and Cabias, respectively, will be: a. P377,000 and P780,000 b. P330,570.50 and P826,429.50 c. P325,000 and P650,000 d. P237,714.75 and P594,285.25
Ballesteros is retiring from the partnership and the partners have agreed that "other assets" should be adjusted to their fair value of P1,950,000 at December 31, 2020. They further agree that Ballesteros will receive P793,000 cash for his partnership interest exclusive of the loan, which is to be paid in full, and that no goodwill implied by Ballesteros' payment will be recorded. After Ballesteros' retirement, the capital balances of Abellana and Cabias, respectively, will be: a. P377,000 and P780,000 b. P330,570.50 and P826,429.50 c. P325,000 and P650,000 d. P237,714.75 and P594,285.25
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...
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Transcribed Image Text:Ballesteros is retiring from the partnership and the partners have agreed
that "other assets" should be adjusted to their fair value of P1,950,000 at
December 31, 2020. They further agree that Ballesteros will receive
P793,000 cash for his partnership interest exclusive of the loan, which is to
be paid in full, and that no goodwill implied by Ballesteros' payment will be
recorded.
After Ballesteros' retirement, the capital balances of Abellana and Cabias,
respectively, will be:
a. P377,000 and P780,000
b. P330,570.50 and P826,429.50
c. P325,000 and P650,000
d. P237,714.75 and P594,285.25
Transcribed Image Text:- The December 31, 2020, balance sheet of the Abellana, Ballesteros, and
Cabias partnership is summarized as follows:
P325,000 Ballesteros loan
1,625,000 Abellana, capital
Ballesteros, capital
P325,000
325,000
Cash
Other assets, at cost
650,000
Cabias, capital
650,000
P1,950,000
P1,950,000
The partners share profits and losses as follows:
Abellana
20%
Ballesteros 30%
Cabias
50%
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