Required: Calculate the capital balances of each partner after the admission of Garachico, assuming that bonuses are recorded when appropriate for each of the following assumptions: 1. Garachicho paid Castro P50,000 for 40% of his interest. 2. Garachico invested P50,000 for a one-sixth interest in the partnership. 3. Garachico invested P50,000 for a 25% interest in the partnership.
Required: Calculate the capital balances of each partner after the admission of Garachico, assuming that bonuses are recorded when appropriate for each of the following assumptions: 1. Garachicho paid Castro P50,000 for 40% of his interest. 2. Garachico invested P50,000 for a one-sixth interest in the partnership. 3. Garachico invested P50,000 for a 25% interest in the partnership.
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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Transcribed Image Text:Admission by Purchase of Interest or Investment of Assets
Castro and Falceso are partners who share profits and losses in a ratio of 2:3, respectively, and have the
following capital balances on Sept. 30, 2020: Castro, Capital, P100,000 Cr. and Falceso, Capital, P150,000
Cr. The partners agreed to admit Garachico to the partnership.
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Required: Calculate the capital balances of each partner after the admission of Garachico, assuming that
bonuses are recorded when appropriate for each of the following assumptions:
1. Garachicho paid Castro P50,000 for 40% of his interest.
2. Garachico invested P50,000 for a one-sixth interest in the partnership.
3. Garachico invested P50,000 for a 25% interest in the partnership.
4. Garachico invested P50,000 for a 15% interest in the partnership.
Transcribed Image Text:Admission by Purchase of Interest or Investment of Assets
Dolores Aguilar, Işolde Sustrina, and Beth Bigalbal are partners in Cavite Realty Company. Their capital
balances as at July 31, 2019, are as follows:
Aguilar, Capital
Sustrina, Capital
Bigalbal, Capital
450,000
150,000
300,000
Each partner has agreed to admit Nelia Pascual to the partnership.
Required:
Prepare the entries to record Pascual's admission to or Aguilar's withdrawal from the partnership under
each of the following conditions:
a. Pascual paid Aguilar P125,000 for 20% of Aguilar's interest in the partnership.
b. Pascual invested P200,000 cash in the partnership and received an interest equal to her investment.
c. Pascual invested P300,000 cash in the partnership for a 20% interest in the business. A bonus is to be
recorded for the original partners on the basis of their capital balances.
d. Pascual invested P300,000 cash in the partnership for a 40% interest in the business. The original
partners gave Pascual a bonus according to the ratio of their capital balances on July 31, 2019.
e. Aguilar withdrew from the partnership, taking P525,000. The excess of withdrawn assets over
Aguilar's partnership interest is distributed according to the balances of the Capital accounts.
f. Aguilar withdrew by selling her interest directly to Pascual for P600,000.
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