Problem 8 Determining a New Partner's Investment Cost (Incentive Activity) The following condensed balance sheet to presented for the partnership of Balagtas, Sicat, and Par, who share profits and losses in the ratio of 4:3:3, respectively. Cash Php 400,000 Accounts Payable Php 1,500,000 Other Assets 7,100,000 Balagtas, Capital 2,600,000 Sicat, Capital 1,800,000 Par, Capital 1,600,000 Total Assets Php 7,500,000 Total Liabilities and Capital Php 7,500,000 Assume that the partnership decided to admit Rementina as a new partner with one-fourth interest. Required: For each of the following independent cases, determine the amount that Rementina must contribute in cash or other assets: 1. Goodwill of Php 300,000 to be recorded and allocated to the prior partners. 2. The prior partners, Balagtas, Sicat, and Par, agreed to credit Rementina for Php 100,000 of goodwill upon admission into the partnership.
Problem 8 Determining a New Partner's Investment Cost (Incentive Activity) The following condensed balance sheet to presented for the partnership of Balagtas, Sicat, and Par, who share profits and losses in the ratio of 4:3:3, respectively. Cash Php 400,000 Accounts Payable Php 1,500,000 Other Assets 7,100,000 Balagtas, Capital 2,600,000 Sicat, Capital 1,800,000 Par, Capital 1,600,000 Total Assets Php 7,500,000 Total Liabilities and Capital Php 7,500,000 Assume that the partnership decided to admit Rementina as a new partner with one-fourth interest. Required: For each of the following independent cases, determine the amount that Rementina must contribute in cash or other assets: 1. Goodwill of Php 300,000 to be recorded and allocated to the prior partners. 2. The prior partners, Balagtas, Sicat, and Par, agreed to credit Rementina for Php 100,000 of goodwill upon admission into the partnership.
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.1BPR
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Problem 8
Determining a New Partner's Investment Cost (Incentive Activity)
The following condensed balance sheet to presented for the partnership of Balagtas, Sicat, and Par,
who share profits and losses in the ratio of 4:3:3, respectively.
Cash
Php 400,000
Accounts Payable
Php 1,500,000
Other Assets
7,100,000
Balagtas, Capital
2,600,000
Sicat, Capital
1,800,000
Par, Capital
1,600,000
Total Assets Php 7,500,000
Total Liabilities and Capital
Php 7,500,000
Assume that the partnership decided to admit Rementina as a new partner with one-fourth interest.
Required:
For each of the following independent cases, determine the amount that Rementina must contribute
in cash or other assets:
1. Goodwill of Php 300,000 to be recorded and allocated to the prior partners.
2. The prior partners, Balagtas, Sicat, and Par, agreed to credit Rementina for Php 100,000 of
goodwill upon admission into the partnership.
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