Nagisa and Karma are partners in an electrical repair business. Their respective capital balances are P90,000 and P50,000, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process, they elect to admit Isogai into the partnership.Required: Prepare the journal entry to record the admission of Isogai into the partnership under each of the following conditions:Isogai acquires one-fourth of Nagisa’s capital interest by paying P30,000 directly to him.Isogai acquires one-fifth of each of Nagisa’s and Karma’s capital interests. Nagisa receives P25,000 and Karma receives P15,000 directly from Isogai.Isogai acquires a one-fifth capital interest for a P60,000 cash investment in the partnership. Total capital after the admission is to be P200,000.Isogai invests P40,000 for a one-fifth interest in partnership capital. Revaluation method was used and other assets are to be recognized (use “Other Assets”).

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Answered: Nagisa and Karma are partners in an…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter4: Gross Income

Section: Chapter Questions

Problem 28P

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Nagisa and Karma are partners in an electrical repair business. Their respective capital balances are P90,000 and P50,000, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive interviewing process, they elect to admit Isogai into the partnership.

Required: Prepare the journal entry to record the admission of Isogai into the partnership under each of the following conditions:

Isogai acquires one-fourth of Nagisa’s capital interest by paying P30,000 directly to him.
Isogai acquires one-fifth of each of Nagisa’s and Karma’s capital interests. Nagisa receives P25,000 and Karma receives P15,000 directly from Isogai.
Isogai acquires a one-fifth capital interest for a P60,000 cash investment in the partnership. Total capital after the admission is to be P200,000.
Isogai invests P40,000 for a one-fifth interest in partnership capital. Revaluation method was used and other assets are to be recognized (use “Other Assets”).

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