The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows: Book Value Fair Value Cash P20,000 P20,000 Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000 Plant Assets – net 100,000 120,000 P270,000 P440,000 Accounts Payable P50,000 P50,000 Rose, Capital 120,000 Dailine, Capital 100,000 P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000. Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized. a. P175,000 c. P195,000 b. 155,000 D. 205,000
The
value and fair value and
Book Value Fair Value
Cash P20,000 P20,000
Inventories 50,000 200,000
Plant Assets – net 100,000 120,000
P270,000 P440,000
Accounts Payable P50,000 P50,000
Rose, Capital 120,000
Dailine, Capital 100,000
P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla
invests P95,000 cash and a building to be used in the business with a book value to Janyla for
P100,000 and a fair value of P120,000.
Compute the capital balance of Dailine after the admission assuming that the assets are
revalued and
a. P175,000 c. P195,000
b. 155,000 D. 205,000
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