John and Mathew share profits and losses in the ratio of 3:2. They admit Mohanty into their firm to 1/6 share in profits. John personally guaranteed that Mohanty’s share of profit, after charging interest on capital @ 10 per cent per annum would not be less than Rs. 30,000 in any year. The capital provided was as follows:John Rs. 2,50,000, Mathew Rs. 2,00,000 and Mohanty Rs. 1,50,000. The profit for the year ending March 31,2015 amounted to Rs. 1,50,000 before providing interest on capital. Show the Profit & Loss Appropriation Account if new profit sharing ratio is 3:2:1.

Karasuma and Irina are partners who have capitals of P6,000 and P4,800 and who share profits in the ratio of 3:2. Koro is admitted as a partner upon investing cash of P5,000, with profits to be shared equally. Assume that Koro is allowed a 40% interest in the firm. What entries would be made in recording the investment if the asset revaluation method is used? What entries would be made if the bonus method is used? Which method will be preferred by Koro? How much will Koro gain by the use of this method?

Phillip and Case are in the process of forming a partnership to import Belgian chocolates, to which Phillip will contribute one-third time and Case full time. They have discussed the following alternative plans for sharing profit and losses. a. In the ratio of their initial investments, which they have agreed will be $129,000 for Phillip and $301,000 for Case. b. In proportion to the time devoted to the business. c. A salary allowance of $6,000 per month to Case and the balance in accordance with their initial investment ratio. d. A $6,000 per month salary allowance to Case, 10% Interest on their initial investments, and the balance equally. The partners expect the business to generate profit as follows: Year 1, $103,000 loss; Year 2, $153,000 profit; and Year 3, $253,000 profit Required: Complete a schedule for each of the four plans being considered by showing how the partnership profit or loss for each year would be allocated to the partners. (Enter all amounts as positive value.…