Myrna and Norma are partners sharing profits and losses in the ratio of 60% and 40%, respectively. The partnership balance sheet at August 30, 2016 follows: Cash $ 27,000 Other assets 266,000 Norma, loan 20,000 Total $ 313,000 Accounts Payable $ 30,000 Myrna, loan 13,000 Myrna, capital 180,000 Norma,capital 90,000 Total $ 313,000 At this date, OLGA was admitted as a partner for a consideration of $97,500 cash for a 40% interest in capital and in profits. Required: Choose the correct answer with solution. 1. Assume OLGA is admitted by purchase of 40% each of the original partners' interest, determine how the $97,500 will be apportioned to MYRNA and NORMA. a. MYRNA 65,700 and NORMA 31,800 b. MYRNA 64,800 and NORMA 32,700 c. MYRNA 65,500 and NORMA 32,000 d. MYRNA 65,900 and NORMA 31,600 2. Assume OLGA is admitted by investing the $97,500 into the partnership, determine the effects of any bonus over the capital balances of the original partners: a. MYRNA (19,800) and NORMA (29,700) b. MYRNA 18,000 and NORMA 29,700 c. MYRNA (29,700) and NORMA (19,800) d. MYRNA (18,675) and NORMA (12,450)
Myrna and Norma are partners sharing profits and losses in the ratio of 60% and 40%, respectively. The partnership balance sheet at August 30, 2016 follows: Cash $ 27,000 Other assets 266,000 Norma, loan 20,000 Total $ 313,000 Accounts Payable $ 30,000 Myrna, loan 13,000 Myrna, capital 180,000 Norma,capital 90,000 Total $ 313,000 At this date, OLGA was admitted as a partner for a consideration of $97,500 cash for a 40% interest in capital and in profits. Required: Choose the correct answer with solution. 1. Assume OLGA is admitted by purchase of 40% each of the original partners' interest, determine how the $97,500 will be apportioned to MYRNA and NORMA. a. MYRNA 65,700 and NORMA 31,800 b. MYRNA 64,800 and NORMA 32,700 c. MYRNA 65,500 and NORMA 32,000 d. MYRNA 65,900 and NORMA 31,600 2. Assume OLGA is admitted by investing the $97,500 into the partnership, determine the effects of any bonus over the capital balances of the original partners: a. MYRNA (19,800) and NORMA (29,700) b. MYRNA 18,000 and NORMA 29,700 c. MYRNA (29,700) and NORMA (19,800) d. MYRNA (18,675) and NORMA (12,450)
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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Question
Myrna and Norma are partners sharing profits and losses in the ratio of 60% and 40%, respectively. The partnership balance sheet at August 30, 2016 follows:
Cash $ 27,000
Other assets 266,000
Norma, loan 20,000
Total $ 313,000
Accounts Payable $ 30,000
Myrna, loan 13,000
Myrna, capital 180,000
Norma,capital 90,000
Total $ 313,000
At this date, OLGA was admitted as a partner for a consideration of $97,500 cash for a 40% interest in capital and in profits.
Required:
Choose the correct answer with solution.
1. Assume OLGA is admitted by purchase of 40% each of the original partners' interest, determine how the $97,500 will be apportioned to MYRNA and NORMA.
a. MYRNA 65,700 and NORMA 31,800
b. MYRNA 64,800 and NORMA 32,700
c. MYRNA 65,500 and NORMA 32,000
d. MYRNA 65,900 and NORMA 31,600
2. Assume OLGA is admitted by investing the $97,500 into the partnership, determine the effects of any bonus over the capital balances of the original partners:
a. MYRNA (19,800) and NORMA (29,700)
b. MYRNA 18,000 and NORMA 29,700
c. MYRNA (29,700) and NORMA (19,800)
d. MYRNA (18,675) and NORMA (12,450)
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