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On December 31, 2017, the Statement of Financial Position of CAR Partnership shows the following data with profits or loss sharing ratio of 1:3:6 1 Cash P 5,000,000 Carla P 5,000,000 Non cash assets 15,000,000 Ara 3,000,000 Ren 2,000,000 Total liabilities P 10,000,000 On January 1, 2018, Ellen is admitted to the new partnership to be named CARE by purchasing 20% capital interest of Carla in the amount of P 1,200,000. Which of the following statements is correct? Ellen will have capital credit of P 200,000 after the dissolution The old partnership will recognize gain of P 200,000 resulting from Ellen's admission The new partnership will have a total capital of P 10,200,000 a. b. C. d. Carla will have P 4,000,000 capital balance after the admission of Ellen

On December 31, 2017, the Statement of Financial Position of CAR Partnership shows the following data with profits or loss sharing ratio of 1:3:6 1 Cash P 5,000,000 Carla P 5,000,000 Non cash assets 15,000,000 Ara 3,000,000 Ren 2,000,000 Total liabilities P 10,000,000 On January 1, 2018, Ellen is admitted to the new partnership to be named CARE by purchasing 20% capital interest of Carla in the amount of P 1,200,000. Which of the following statements is correct? Ellen will have capital credit of P 200,000 after the dissolution The old partnership will recognize gain of P 200,000 resulting from Ellen's admission The new partnership will have a total capital of P 10,200,000 a. b. C. d. Carla will have P 4,000,000 capital balance after the admission of Ellen

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 20P
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PROBLEM SOLVING: 1 On December 31, 2017, the Statement of Financial Position of CAR Partnership shows the following data with profits or loss sharing ratio of 1:3:6 Cash P 5,000,000 Carla P 5,000,000 Non cash assets 15,000,000 Ara 3,000,000 Ren 2,000,000 Total liabilities P 10,000,000 On January 1, 2018, Ellen is admitted to the new partnership to be named CARE by purchasing 20% capital interest of Carla in the amount of P 1,200,000. Which of the following statements is correct? a. Ellen will have capital credit of P 200,000 after the dissolution b. The old partnership will recognize gain of P 200,000 resulting from Ellen's admission C. The new partnership will have a total capital of P 10,200,000 d. Carla will have P 4,000,000 capital balance after the admission of Ellen 2. SG, AP and TS are partners with capital balances of P 784,000, P 2,730,000 and P 1,190,000, respectively, sharing profits and losses in the ratio of 3:2:1. DJ is admitted as a new partner bringing with him expertise and is to invest cash for a 25% interest in the partnership which includes a credit of P 735,000 for bonus upon his admission. How much cash should DJ contribute? P 1,323,000 b. Р 2,100,000 P 1,575,000 d. P 588,000 a
Transcribed Image Text:PROBLEM SOLVING: 1 On December 31, 2017, the Statement of Financial Position of CAR Partnership shows the following data with profits or loss sharing ratio of 1:3:6 Cash P 5,000,000 Carla P 5,000,000 Non cash assets 15,000,000 Ara 3,000,000 Ren 2,000,000 Total liabilities P 10,000,000 On January 1, 2018, Ellen is admitted to the new partnership to be named CARE by purchasing 20% capital interest of Carla in the amount of P 1,200,000. Which of the following statements is correct? a. Ellen will have capital credit of P 200,000 after the dissolution b. The old partnership will recognize gain of P 200,000 resulting from Ellen's admission C. The new partnership will have a total capital of P 10,200,000 d. Carla will have P 4,000,000 capital balance after the admission of Ellen 2. SG, AP and TS are partners with capital balances of P 784,000, P 2,730,000 and P 1,190,000, respectively, sharing profits and losses in the ratio of 3:2:1. DJ is admitted as a new partner bringing with him expertise and is to invest cash for a 25% interest in the partnership which includes a credit of P 735,000 for bonus upon his admission. How much cash should DJ contribute? P 1,323,000 b. Р 2,100,000 P 1,575,000 d. P 588,000 a
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