Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 15, Problem 1EA
On May 1, 2017, BJ and Paige formed a
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On May 1, 2016, Peppa and Piggy formed a partnership and agreed to share profits and losses in the ration of 3:7, respectively. Peppa contributed a parcel of land that cost P10,000. Piggy contributed P40,000 cash. The land was sold for P18,000 on May 1, 2016, immediately after formation of the partnership. What amount should be recorded in Peppa’s capital account on formation of the partnership?
Claire,Dolly and Ellery formed the CDE Partnership on September 1, 2016, with the following assets, measured at book values in their respective records, contributed by each partner:
CLAIREDOLLYELLERYCash486,000460,107231,903Accounts Receivable109,620-141,000Property, Plant and Equipment 2,094,390450,000-
A part of Claire's cash contribution, P324,000, comes from personal borrowings. Also, PPE of Claire and Dolly are mortgaged with the bank for P1,458,000 and P108,000, respectively. The partnership is to assume responsibility for these PPE mortgages. The fair value of the accounts receivable contributed by Ellery is P137,000 while the PPE contributed by Dolly at this date is P510,300. The partners have agreed to share interests on a 5:3:2 ratio, to Claire, Dolly and Ellery, respectively.
Required: Use Bonus and Goodwill Method in computing the Capital balances of Claire, Dolly and Ellery.
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60 % and 40% , respectively . The partnership balance sheet reveals that at August 30 , 2016 , the partners have the following capital balances:
Herbert , Capital 25,000
Ireneo , Capital 15,000
At this date , Joshua was admitted as a partner for a consideration of P45,000 cash for a 40 % interest in capital and in profits.
Assumptions:
A. Joshua is admitted by investment and Goodwill Method / Revaluation Method is used.
B. Joshua is admitted by investment and the adjusted capital after his admission is 90,000.
Required:
1. Make a table
Rows for Assumptions a and b must include Original Capital Interest Purchased and Adjusted Capital.
Rows for Assumptions c d and e must include Original Capital Bonus (there is any)Goodwill (there is any) and Adjusted Capital
2. The journal entry upon the admission of Joshua.
3. Answer the following questions for each assumption:
i. What will be the total capital of the…
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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