The firm also has two alternatives to find out the new ratio and sacrificing ratio of the partners areIf A and B are the partners sharing profits and losses in the ratio of 5:3, admitting C for 1/5th shareof future profits in which he acquires 3/16th from A and 1/16th from B and,If A and B are the partners and sharing profits and losses in the ratio of 4:1, admitting Cas a newpartner in which he acquires 2/5th of A's share and 1/5 of B's share.Calculate new ratio and sacrificing ratio of the partners and suggest which alternative is good forthe new partner? Comment it.

Introduction Partnership may be defined as that type of business firm in which two or more persons…

Answered: The firm also has two alternatives to…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 44P

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The firm also has two alternatives to find out the new ratio and sacrificing ratio of the partners areIf A and B are the partners sharing profits and losses in the ratio of 5:3, admitting C for 1/5th shareof future profits in which he acquires 3/16th from A and 1/16th from B and,If A and B are the partners and sharing profits and losses in the ratio of 4:1, admitting C as a newpartner in which he acquires 2/5th of A ’s share and 1/5 of B’s share.Calculate new ratio and sacrificing ratio of the partners and suggest which alternative is good forthe new partner? Comment it.
The partnership obtained a profit for the period. Salaries were distributed, and so are the interests on beginning capital balances. The next step to be done is to provide bonus to one of the partners. After calculating the bonus and had it given to the partner, the net income became insufficient. What should be done regarding this matter? a. Continue to provide the bonus and the insufficiency should be divided among the partners. b. The bonus should not be given anymore, and the remaining balance to be divided among the partners. c. The whole amount of profit should be divided among the partners equally. d. None of the given.
A is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of net income before salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P100,000. What amount of income would be necessary so that A would consider the choices to be equal?
In the Quirino-Aquino Partnership, Quirino and Aquino had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. The bonus method was used to record Martial’s admittance as a new, partner. What ratio should be used to allocate, to Quirino and Aquino, the excess of Martial’s contribution over the amount credited to Martial’s capital account? Quirino and Aquino’s new relative profit and loss ratio. Quirino and Aquino’s old capital ratio. Quirino and Aquino’s new relative capital ratio. Quirino and Aquino’s old profit and loss ratio.
In the LP Partnership, Lulu and Popo had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. They used the bonus method to record Nova’s admission as a new partner. What ratio should be used to allocate to Lulu and Popo, the excess of Nova’s contribution over the amount credited to Nova’s capital account?
Moore, Probst, and Tanski formed a partnership whose profit and loss agreement contained provisions summarized as follows:(attached)If the weighted-average capital is negative, interest at 10% will be charged against the partner’s profit allocation. All provisions of the profit and loss agreement should be satisfied and any resulting deficiency should be allocated based on the profit and loss percentages. Assuming current-year income of $168,000, determine how the income should be allocated to the partners.
Kali and Jane are contemplating on the profit-sharing strategy of the partnership. However, the selected modes of profit distribution vary according to their level of income. Jane was offered a salary of P50,000 or a salary of P20,000 plus a bonus of 15% of net income after salary and bonus. Per estimate, other partners were to receive also a salary amounting to P150,000. What income level would result to indifference on Jane?
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others. Refer to the information provided above. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded? Multiple Choice
8 Which of the following ratio helps the partners to determine the amount of compensation to be paid by the new partner to the old partners for the share of profit surrendered? a. Sacrificing Ratio b. New Profit Sharing Ratio c. Gaining Ratio d. None of the options are correct
1. When the investment of a new partner is below the new partners' capital balance and goodwill is not recorded, who will receive the bonus: a.The new partner.b.The old partners in their old profit and loss ratio.c.The old partners in their new profit and loss ratio.d.The old and new partners in their new profit and loss ratio 2.S1: Admission of a new partner by investment generally increases the total assets and capital of the new partnership unless there is a negative asset revaluation.S2: Admission of a new partner by the purchase of interest will never affect the total assets and capital of the new partnershipa. S1 is false, S2 is true b. Both statements are true c. Both statements are false d. S1 is true, S2 is false 3. S1: In lumpsum liquidation, the remaining cash available after realization and payment of liquidation expenses, will always be equal to the total interest of the partners.S2: In installment liquidation, the partner who has the highest absorption capacity shall be…
What of the following is NOT a typical term in the contract between GPs and LPs (LPA: limited partnership agreement)? Group of answer choices a. LPA is designed to align the interests of the GP with the limited partners (LPs) using a profit-sharing agreement of private equity. b. At the exit, the LPs receive the capital that was invested in the company and the profits are split. c. The LPs typically receive 20 percent and the GPs 80 percent of the capital gain.
Which of the following statements is correct in relation to limited partners? Select one: a. Their liability is limited to the capital they have agreed to invest in the partnership b. They have no liability for partnership debts c. They have full liability for partnership debts. Which of the following, in the context of entering into a contract, constitutes a binding offer to sell a unique item of furniture? Select one: a. Placing it on display inside a shop with a price attached b. Placing an advert in the newspaper with a price attached c. Telling someone the price you may be willing to accept for it d. Telling someone you will reduce the marked price on it by 10%

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