Tic and Tac are partners with capital balances of P150,000 and P100,000, respectively. They share profits and losses equally. Toe was admitted as a new partner by purchasing 20% interest in the partnership by paying Tic and Tac a total of P70,000. Prior to Toe’s admission, it was determined that the land is undervalued by P50,000.

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 21P
icon
Related questions
Question

Tic and Tac are partners with capital balances of P150,000 and P100,000, respectively. They share profits and losses equally. Toe was admitted as a new partner by purchasing 20% interest in the partnership by paying Tic and Tac a total of P70,000. Prior to Toe’s admission, it was determined that the land is undervalued by P50,000.

 

How much was debited from Tac’s capital due to Toe’s purchase of interest in the partnership? 

What is Tic’s capital balance immediately after the admission of Toe?

Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Sales and Other Dispositions of Assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage