Deadshot, Harley Quinn, and El Diablo are partners sharing profits and losses in the ratio of 5:3:2. At the beginning of the year 2018, they admit Captain Boomerang, who is to invest sufficient cash to give one-third interest in the capital and earnings of the partnership. The balance sheet of the partnership before the admission of Captain Boomerang is presented below: 4,500,000 10,125,000 3,375,000 Cash Liabilities 2,250,000 1,350,000 7,875,000 4,500,000 2,025,000 18,000,000 Receivables Inventories Deadshot, loan Deadshot, capital Harley Quinn, capital El Diablo, capital Total 18,000,000 The partners agree to revalue the inventories at its net realizable value of P2,250,000 and an allowance for doubtful accounts of P1,125,000 is to be set up by the partnership against the receivables. The old partners further agree to bring their capital balances into agreement with their interest in the earnings. 4. How much cash must be invested by Captain Boomerang to acquire one-third interest in the capital and earnings of the partnership? A. 4,050,000 B. 6,750,000 C. 4,500,000 D. 6,075,000 5. Determine the capital balances of the old partners after the admission of Captain Boomerang. Harley Quinn 3,645,000 3,825,000 4,050,000 3,825,000 Deadshot 6,075,000 6,750,000 6,750,000 8,100,000 El Diablo 2,430,000 1,575,000 2,700,000 1,575,000 А. В. С. D.
Deadshot, Harley Quinn, and El Diablo are partners sharing profits and losses in the ratio of 5:3:2. At the beginning of the year 2018, they admit Captain Boomerang, who is to invest sufficient cash to give one-third interest in the capital and earnings of the partnership. The balance sheet of the partnership before the admission of Captain Boomerang is presented below: 4,500,000 10,125,000 3,375,000 Cash Liabilities 2,250,000 1,350,000 7,875,000 4,500,000 2,025,000 18,000,000 Receivables Inventories Deadshot, loan Deadshot, capital Harley Quinn, capital El Diablo, capital Total 18,000,000 The partners agree to revalue the inventories at its net realizable value of P2,250,000 and an allowance for doubtful accounts of P1,125,000 is to be set up by the partnership against the receivables. The old partners further agree to bring their capital balances into agreement with their interest in the earnings. 4. How much cash must be invested by Captain Boomerang to acquire one-third interest in the capital and earnings of the partnership? A. 4,050,000 B. 6,750,000 C. 4,500,000 D. 6,075,000 5. Determine the capital balances of the old partners after the admission of Captain Boomerang. Harley Quinn 3,645,000 3,825,000 4,050,000 3,825,000 Deadshot 6,075,000 6,750,000 6,750,000 8,100,000 El Diablo 2,430,000 1,575,000 2,700,000 1,575,000 А. В. С. D.
Chapter21: Partnerships
Section: Chapter Questions
Problem 57P
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Concept explainers
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.
Question
Transcribed Image Text:Deadshot, Harley Quinn, and El Diablo are partners sharing profits and losses in the ratio of 5:3:2. At the beginning of
the year 2018, they admit Captain Boomerang, who is to invest sufficient cash to give one-third interest in the capital
and earnings of the partnership. The balance sheet of the partnership before the admission of Captain Boomerang is
presented below:
Cash
4,500,000
10,125,000
3,375,000
Liabilities
2,250,000
1,350,000
7,875,000
4,500,000
2,025,000
18,000,000
Receivables
Deadshot, loan
Deadshot, capital
Harley Quinn, capital
El Diablo, capital
Inventories
Total
18,000,000
The partners agree to revalue the inventories at its net realizable value of P2,250,000 and an allowance for doubtful
accounts of P1,125,000 is to be set up by the partnership against the receivables. The old partners further agree to
bring their capital balances into agreement with their interest in the earnings.
4. How much cash must be invested by Captain Boomerang to acquire one-third interest in the capital
and earnings of the partnership?
A. 4,050,000
B. 6,750,000
C. 4,500,000
D. 6,075,000
5. Determine the capital balances of the old partners after the admission of Captain Boomerang.
El Diablo
2,430,000
1,575,000
2,700,000
1,575,000
Deadshot
Harley Quinn
3,645,000
3,825,000
4,050,000
3,825,000
А.
6,075,000
6,750,000
6,750,000
8,100,000
В.
C.
D.
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