Tom and Jerry Tom and Jerry are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances on Sept. 30, 2021. Tom, Capital, P 100,000 credit and Jerry, Capital, P 150,000 credit. The partners agreed to admit Ben to the partnership. Required: Calculate the capital balances of each partner after the admission of Ben, assuming that the bonuses are recorded for each of the following assumptions: a) Ben paid Tom P50,000 for 40% of his interest. b) Ben invested P 50,000 for a one-sixth interest in the partnership. c) Ben invested P 50,000 for 25% interest in the partnership. d) Ben invested P 50,000 for 15% interest in the partnership.

Tom and Jerry Tom and Jerry are partners who share profits and losses in a ratio of 2:3, respectively, and have the following capital balances on Sept. 30, 2021. Tom, Capital, P 100,000 credit and Jerry, Capital, P 150,000 credit. The partners agreed to admit Ben to the partnership. Required: Calculate the capital balances of each partner after the admission of Ben, assuming that the bonuses are recorded for each of the following assumptions: a) Ben paid Tom P50,000 for 40% of his interest. b) Ben invested P 50,000 for a one-sixth interest in the partnership. c) Ben invested P 50,000 for 25% interest in the partnership. d) Ben invested P 50,000 for 15% interest in the partnership.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.
Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.