The capital accounts and profit and loss ratio of A and B are shownbelow:CapitalProfit and Loss ratioP 60,00040,000P 100,00050%50%100%AвGive the journal entries under the following cases:1. C purchases one-half interest of A for P35,000.2. B sells one-fourth of his interest to C for P12,000.3. C purchases one-half interest of both A and B for P55,000 (use twomethods)4. C invests P20,000 for a one-sixth interest in the new firm. Theagreeed new capital is p120,000.5. C invests P40,000 for a one-fourth interest in the new firm.6. C invests P35,000 for a one-fourth interest in the new firm withagreed capitalization of *135,000.7. Cinvests P35,000 for a one-fourth interest in the firm. The agreednew capital is P140,000. After the admission of C, the capital con-tributions must be made equal to the new profit and loss ratio.8. Cinvests P40,000 for a one-third interest in the firm with a totalnew capital of P150,000.

As per our protocol we provide solution to the first three sub-parts only and you have asked…

Give the journal entries under the following cases: 1. C purchases one-half interest of A for P35,000. 2. B sells one-fourth of his interest to C for P12,000. 3. C purchases one-half interest of both A and B for P55,000 (use two methods)

Give the journal entries under the following cases: 1. C purchases one-half interest of A for P35,000. 2. B sells one-fourth of his interest to C for P12,000. 3. C purchases one-half interest of both A and B for P55,000 (use two methods)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Jerry contributed $8,000 for a 25% interest in a bookstore. He also contributed a cash register,…

A: A partnership is a contract between two or more persons to form a business and share profits and…

Q: Josiah has a broker

A: The deduction of interest on investment that is paid to broker depends on the income from the…

Q: Carlo and Jamie are partners who agreed that monthly salaries will be allowed to them as follows:…

A: Solution: As per question., Net Profit after tax: P580000 Annual salary of Carlo: Salary per month *…

Q: Year 1 (April): Tammy purchases 1,000 shares of ABC Corp. stock for $36,000. Year 4 (mid-December):…

A: When the sale price of the securities is more than the purchase price, the difference is recognised…

Q: Assume Joe Harry sells his 25 percent interest in Joe's S Corporation, to Tyrone on January 29.…

A: Sales are made on cash basis and credit basis. the amount to be collected from Sales made on credit…

Q: On October 30, 2019, Tess bought 500 shares of ACTS stock for ₱ 640.00 per share. On November 15,…

A: The gain or loss on the investment can be computed by finding the difference between sales price…

Q: joseph becomes bankrupt before the due date of his acceptance and David rece dividend of 40 per cent…

Q: (Treatment of goodwill) A, B and C were partners sharing profit & in the ratio of 4:3:3. B dies and…

A: A partnership is an agreement where two or more individuals come together to run a business in…

Q: the capital accounts of brock and ian have balances of $120,000 and $100,000, respectively. carla is…

A: Admission Partner's :— Partners Of a continuing business may by common consent decide to admit a new…

Q: Michael transfers $20,000 cash and land to XYZ, Inc. in exchange for all of its stock. The land has…

A: Mortgage- Mortgages are a sort of loan that can be used to buy or keep up a house, land, or another…

Q: Assume Joe Harry sells his 25 percent interest in Joe's S Corp., Inc., to Tyrone on January 29.…

A: Average days to collect accounts receivable (average collection period): This ratio measures the…

Q: Barbara and Hannah are partners who run an accounting and tax consultancy business. The partners…

A: Comment - Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: In 2016, Jane Jones pays $2,500 for 1,000 shares of ABC common stock. On August 27, 2020, Jane…

A: Common stock or share is a part of equity and reported under equity section of balance sheet, common…

Q: P and Q are partners sharing profits as 3:2. They admit R as a new partner for 1/4th share. The…

A: When two or more individuals engage in enterprise as co-owners, the organization is known as a…

Q: Pat invites Tin to join him in his business. Tin agreed that the following adjustments are taken up…

A: Partnership is one of the agreement between two or more than two persons, in which they invest their…

Q: Peter purchases 100 shares of ABC stock for $10,000 on April 20th, and another 100 shares of ABC…

A: Stock basis refers to the amount invested in purchasing the stocks, be it the actual cash paid at…

Q: Partner's Salary of RO 6000 paid to partner Ahmed for the year. The adjustment Journal entry for the…

A: There are three golden rules in accounting for recording the transaction : Debit what comes in ,…

Q: Margo bought stock for $1,500 plus a $25 commission; 18 months later she sold all the stock for…

A: Form 1099-B will also indicate the date the stock was sold. The purchase and sell dates will…

Q: Abdullah, Mazin and Amir are partners sharing profits in the ratio of 9: 6: 3. Mazin retires and…

A: Goodwill means reputation of business which business earns over the period of time. In case of…

Q: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after…

A: Total Division of income = Salaries allowance + Remaining income allocation

Q: A, B and C are partners sharing profits in the ratio of 4:3:2. B retires and Goodwill of the firm is…

A: At the time of retirement goodwill which is already appears in the books should be written off and…

Q: 1 Nemji purchased one share of Stock A for $500. Three years later, Nemji exchanged the share of…

A: When an asset is sold after holding it for a period of more than a year then the…

Q: Margaret Lindley paid $15,050 of interest on her $300,500 acquisition debt for her home (fair market…

A: Deductible interest refers to the amount that is charged on the borrowing taken by the borrower…

Q: For their mutual accommodation a draws A bill for RS. 5,000 on B for three months. B accepts it and…

A: Meaning of Accommodation Bills. Bills of Exchange are usually drawn to facilitate trade…

Q: Mazin, Mansoor and Malik started a partnership fim on January 1, 2019. They contributed RO. 50,000,…

A: Journal entries refers to recording or posting of the business transactions into the books of the…

Q: If the partnership of Jack and King has a book value of P250,000 and Ace purchases one half interest…

A: If the share of the firm is purchased by someone then business worth should be calculated on the…

Q: How much of the October 1, 2020 loss may Tom deduct this year?

A: Loss deduct = purchases - sales Given purchases = 31000 Sales = 10000

Q: Barrot and Bañaga are partners with capital balances of P400,000 and P260,000 respectively. They…

A: Partnership refers to form of organization structure where business is owned by the partners.…

Q: On 1 August 2023, Alex bought an apartment in Johannesburg for R1 200 000. He decided to sell a 40%…

A: Reference:Calculate your transfer duty. (2019, February 19). Private Property.…

Q: Mac sold a tract of land with a carrying amount of P3,000,000 to Poon July 1, 2018. 1,200,000 was…

A: Non Current Assets :— It is the asset that held for more than one year. It is hold for long term. It…

Q: Simon transfers 100 shares of Brown Corporation stock to Samantha as part of a divorce settlement.…

A: Simon transfers 100 shares of Brown Corporation stock to SamanthaThe cost of the stock to Simon is…

Q: Fred owns 25% of Eaton and at January 1, 2020 has a balance in its Investment account of $40,000.…

A: Opening balance: The balance when the accounting period begins. Last period balance carried over to…

Q: We have the following facts: The three below meet on January 2, 2021 and decide the following will…

A: Answer

Q: PEDRO, and PABLO share partnership profits and losses in a 7:3 ratio and their October 31, 2021…

A: Revaluation A/c Particulars Amount Particulars Amount To Accounts receivable (P380,000 -…

Q: John bought 2,250 shares of Intel stock on October 18, 2018, for $55 per share plus a $750…

A: Asset cost basis, often called as "basis," is the original financial value assigned to an asset for…

Q: Ryan Neal bought 1,400 shares of Ford at $15.92 per share. Assume a commission of 2% of the purchase…

A: Given, Number of shares bought = 1,400 Share price = $15.92 Commission = 2% of purchase price

Q: Albert, Billy, and Cathy share profits and losses of their partnership as 3:5:4, respectively. If…

A: Ratio = 3:5:4 Total ratio=3+5+4 =12 So Albert's share will be 3/12 Billy's share…

Q: Bill and Bob share profits of their p

A: Lets understand the basics. Partnership is an agreement between two or more person who works…

Q: Wilson Beckett buys a share of common stock directly from Anston Corporation for $13 in cash.…

A: Common stock is a type of security that represents ownership in an organization. After creditors,…

Q: Sarah purchased a warehouse for £420,000 in September 2020. She sold a retail premises to Bettina…

A: STAMP DUTY LAND TAX (non-residential )Freehold and Leasehold Premiums0 - £150,0000%£150,001 -…

Q: Harry owns 25% of David. On January 1, 2020 Harry’s investment account has a balance of $500,000. On…

A: Investment: It is an asset or item which is purchased and held to generate income or for…

Question

The capital accounts and profit and loss ratio of A and B are shown
below:
Capital
Profit and Loss ratio
P 60,000
40,000
P 100,000
50%
50%
100%
A
в
Give the journal entries under the following cases:
1. C purchases one-half interest of A for P35,000.
2. B sells one-fourth of his interest to C for P12,000.
3. C purchases one-half interest of both A and B for P55,000 (use two
methods)
4. C invests P20,000 for a one-sixth interest in the new firm. The
agreeed new capital is p120,000.
5. C invests P40,000 for a one-fourth interest in the new firm.
6. C invests P35,000 for a one-fourth interest in the new firm with
agreed capitalization of *135,000.
7. Cinvests P35,000 for a one-fourth interest in the firm. The agreed
new capital is P140,000. After the admission of C, the capital con-
tributions must be made equal to the new profit and loss ratio.
8. Cinvests P40,000 for a one-third interest in the firm with a total
new capital of P150,000.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

X, Y and Z are partners and have equities of P 5 000 each. With the consent of X and Y, Z is about to sell ½ of his equity to W for a bag of popcorn and P 50 cash. Give the entry on the books of the partnership to record the admission of W
Bruce and Rachel agree to form a partnership on July 1. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce's assets and liabilities are given below (please see the attached image) Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: a) capital accounts will remain fixed; b) 12% interest profit computed on capital; c) salaries of P30,000 each for 2019 but will be twice this amount next year and thereafter; d)10% interest charge on partners' drawings made beyond the agreed salaries; and e)remaining profits are to be shared equally. Directions: a. Prepare two journal entries to set up the partnership b. Prepare a statement of financial position for the partnership as…
D1.
John bought 1,000 shares of intel stock on October 18,2015, for $30 per share, plus a $750 commission he paid to his broker. On December 12, 2019, he sold the shares for $42.50 per share. He also incurred a $1,000 fee for this transaction. 1. What is John's adjusted basis in the 1,000 shares of intel stock? 2. What amount does John realize when he sells the 1,000 shares ? 3. What is the gain or loss for John on sale of his intel stock? 4. What is the character of the gain or loss?
Interest on drawings was RO. 270 for Saud, RO.180 for Salim and RO. 90 for Sulaimon. The accounting entry for charging interest on drawings to each partners will be: a. Dr: Saud's capital account RO 135 Dr: Salim's capital account RO 90 Dr: Sulaimon's capital account RO 45 Cr: Interest on drawings account RO 270 b. Dr: Saud's capital account RO 270 Dr: Salim's capital account RO 180 Dr: Sulaimon's capital account RO 90 Cr: Interest on drawings account RO 540 c. Dr; Interest on drawing account RO 270 Cr: Saud's capital account RO 135 Cr: Salim's capital account RO 90 Cr: Sulaimon's capital account RO 45 d. Dr: Saud's capital account RO 270 Dr: Salim's capital account RO 180 Dr: Sulaimon's capital account RO 90 Cr: Profit and loss account RO 540
W owes Y, the managing partner of XYZ Partnership, P50,000 due on Oct. 1, 2021. W also owes XYZ partnership P100,000 due on Oct 31, 2021. If W pays the managing partner P50,000. How will the payment be applied? Explain.
M, N and O are partners sharing profits in the ratio of 2: 2: 2. N dies on 30th Jun 2020 due to ill health. The company profits for the last 3 years was OMR 20,000, OMR 20,000 and OMR 20,000. Calculate the profit share of N? O a. None of the options are correct O b. OMR 3333.33 O c. OMR 20,000 d. OMR 10,000
Aaron and Jireh share profits in the ratio of 2:3. Their capital contributions are: P150,000 to Aaron and P250,000 to Jireh. Give the journal entries to record the admission of BJ under each of the following assumptions: a. BJ purchases 1/3 interest of Aaron for P50,000. b. Jireh sells ½ of her interest to BJ for P140,000. c. BJ invests P120,000 for a ¼ interest in the firm. Partners agreed that the new capitalization is P480,000. d. BJ invests 90,000 for a 1/5 interest in a new capitalization of P500,000.
If C retired and received ₱90,000 as a retirement price, how much will be the adjusted capital of A under bonus method?
Nina owes P275,000 to Maylene dated Sept 10, 2001, 100 days after the date for value received. However Maylene sold this to Bing on Oct 10, 2001 at a discount rate of 16.5%. Find Bing's proceeds and the maturity date.
Erin purchased stock in JKL Corporation several years ago for $8,750. In the current year, she sold the same stock for $12,800. She paid a $200 sales commission to her stockbroker. 1. What is Erin's amount realized?$fill in the blank 1 2. What is Erin's adjusted basis?$fill in the blank 2 3. What is Erin's realized gain or loss?$fill in the blank 3 gain 4. What is Erin's recognized gain or loss?$fill in the blank 5 gain 5. How is the gain or loss treated for tax purposes (if any)? Because the stock has been held for more than a year, there is . It will be taxed at , depending on the taxpayer's income.