Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances: Herbert , Capital 25,000 Ireneo , Capital 15,000 At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits. Assumptions: A. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used. B. Joshua is admitted by investment and the adjusted capital after his admission is 90,000. Required: 1. Make a table Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital. Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is any) and Adjusted Capital 2. The journal entry upon the admission of Joshua. 3. Answer the following questions for each assumption: i. What will be the total capital of the partnership upon Joshua's admission? ii. What will be the new partnership sharing agreement? iii. What amount of capital will be credited to Joshua upon his admission?
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances: Herbert , Capital 25,000 Ireneo , Capital 15,000 At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits. Assumptions: A. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used. B. Joshua is admitted by investment and the adjusted capital after his admission is 90,000. Required: 1. Make a table Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital. Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is any) and Adjusted Capital 2. The journal entry upon the admission of Joshua. 3. Answer the following questions for each assumption: i. What will be the total capital of the partnership upon Joshua's admission? ii. What will be the new partnership sharing agreement? iii. What amount of capital will be credited to Joshua upon his admission?
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 43P
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Question
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances:
Herbert , Capital 25,000
Ireneo , Capital 15,000
At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits.
Assumptions:
A. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used.
B. Joshua is admitted by investment and the adjusted capital after his admission is 90,000.
Required:
1. Make a table
Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital.
Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is any) and Adjusted Capital
2. The journal entry upon the admission of Joshua.
3. Answer the following questions for each assumption:
i. What will be the total capital of the partnership upon Joshua's admission?
ii. What will be the new partnership sharing agreement?
iii. What amount of capital will be credited to Joshua upon his admission?
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT