ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Chapter 15, Problem 8P
To determine
Identify the correct option for who gets the money if the
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5. Assume that a partnership had assets with a book value of P240,000 and a
market value of P195,000, outside liabilities of P70,000, loans payable to
partner Able of P20,000, and capital balances for partners Able, Baker, and
Chapman of P70,000, P30,000, and P50,000.
How much would Able receive upon liquidation of the partnership assuming
profits and losses are allocated equally?
a. P70,000
b. P90,000
C. P75,000
d. P55,000
If the net income of the partnership is P 250,000 and the profit/loss ratio is 1:3:2 for A, B and C, respectively, how much is the share of C in the net income?
A. P 50,000
B. P 41,667
C. P 125,000
D. P 83,333
1. Partners MM and LL have profit and loss agreement with the following provisions: salaries of P30,000 and P45,000 for MM and LL, respectively; a bonus to MM of 10% net income after salaries and bonus; and interest of 10% on average capital balances of P20,000 and P35,000 for MM and LL, respectively. One-third of any remaining profits will be allocated to MM and the balance to LL. If the partnership had a net income of P104,500, how much should be allocated to MM, assuming the provisions of the profit and loss agreement are ranked by order of priority, starting with salaries?2. Renalie and Ben are partners who share profits and losses in the ratio of 6:4, respectively. On June 1, 20X2, their respective capital accounts were as follows:• Renalie - P60,000 • Ben - P50,000On the same date, Jeremiah was admitted as a partner with 1/5 interest in capital and profits for an investment of P40,000. What is the capital of Ben after Jeremiah’s admission if the partnership began with a total…
Chapter 15 Solutions
ADVANCED ACCOUNTING
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - What is the purpose of a statement of liquidation?...Ch. 15 - Prob. 6QCh. 15 - Prob. 7QCh. 15 - Prob. 8QCh. 15 - What is the purpose of a proposed schedule of...Ch. 15 - Prob. 10Q
Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - A partnership is considering possible liquidation...Ch. 15 - What is a predistribution plan? a. A list of the...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 19PCh. 15 - The following balance sheet is for a local...Ch. 15 - Prob. 21PCh. 15 - Prob. 22PCh. 15 - Prob. 23PCh. 15 - Prob. 24PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29PCh. 15 - Prob. 30PCh. 15 - Prob. 31PCh. 15 - Prob. 32PCh. 15 - Prob. 33P
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- Juan contributes marketable securities to a partnership. The book value of the securities is $7,000 and they have a current market value of $10,000. What amount should the partnership record in Juans Capital account due to this contribution? A. $10,000 B. $7,000 C. $3,000 D. none of the abovearrow_forwardThe 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.arrow_forwardThe 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.arrow_forward
- A partnership has the following capital balances: X (50 percent of profits and losses) = $150,000; Y (30 percent of profits and losses) = $120,000; Z (20 percent of profits and losses)= $80,000. If the partnership is to be liquidated and $30,000 becomes immediately available, who gets that money? Choose the correct.a. $0 to X, $18,000 to Y, $12,000 to Z.b. $15,000 to X, $9,000 to Y, $6,000 to Z.c. $12,800 to X, $8,600 to Y, $8,600 to Z.d. $24,000 to X, $6,000 to Y, $0 to Z.arrow_forwardA partnership has the following capital balances: X (50 percent of profits and losses) = $150,000; Y (30 percent of profits and losses) = $120,000; Z (20 percent of profits and losses) = $80,000. If the partnership is to be liquidated and $30,000 becomes immediately available, who gets that money? $0 to X, $18,000 to Y, $12,000 to Z. $15,000 to X, $9,000 to Y, $6,000 to Z. $12,800 to X, $8,600 to Y, $8,600 to Z. $24,000 to X, $6,000 to Y, $0 to Z.arrow_forward9. A partnership showed the following account balances: sales, P70,000; cost of sales,P40,000; operating expenses. P10,000; partners’ salaries, P13,000; interest paid tobanks, P2,000; interest allowances on average capital balances, P2,500 and partners’drawings, P8,000. How much is the partnership profit?arrow_forward
- Q)1A) Salim and Rashid form a partnership, investing OR 80,000 and OR 120,000, respectively. Required: Determine their shares of net income: Net income is OR 60,000. The first OR 30,000 is shared on the basis of partner capital balances. The next OR 20,000 is based on partner services, with Salim getting 40% and Rashid 60%. The remainder is shared equally. B) How can partnership profits and losses be allocated.arrow_forward1. The ABC Partnership reports net income of P60,000. If Partners A, B, and C have income ratio of 50%, 30%, and 20%, respectively. What is the share of Partner C from the net income of the partnership, if he was given a capital ratio of 25%? 2. The capital balances in DEA Partnership are: D, capital P60,000; E, capital P50,000; and A, capital P40,000 and income ratios are: 5:3:2, respectively. The DEAR Partnership is formed by admitting R to the firm with cash investment of P60,000 for a 25% interest in capital. What is the amount of bonus to be credited to A, capital in admitting R? 3. Ranken purchases 50% of Lark’s capital interest in the K and L partnership for P22,000. If the capital balances of Kim and Lark are P40,000 and P30,000, respectively, Ranken’s capital balance following the purchase isarrow_forward1. X is indebted to the partnership for P10,000.00 and to the managing partner, Y, for P20,000.00. Y was able to collect from X, P6,000.00. How much should Y give the partnership? a. P2,500.00 b. P2,000.00 c. P3,000.00 d P1,500.002. The ZXC Partnership is very successful. However, it was later on discovered that Partner T, the accountant of the partnership, was working as a part-time accountant in a university. What is the remedy of the partnership against T? a. None of the above b. .The partnership may compel A to remit all his salaries. c. The partnership may compel A to resign in the university. d. The partnership may file a criminal complaint of estafa against Aarrow_forward
- T2 would like to purchase a partnership interest from T1. At the time of the purchase, T1's outside basis in the partnership interest is $20,000, which includes $3,000 of liabilities of the partnership allocable to T1. Determine T2's initial outside basis in the partnership interest if he acquires it from T1 for $27,500 in cash. Type your answer...arrow_forwardAssume that Partner Z invested $104,551 in cash to join the partnership. What would be the increase in Partner X's capital under the bonus method? (Round to the nearest dollar). Please dont give solutions in image thnxarrow_forwardThe picture attached here is the problem. Choose the correct LETTER of answer: What is the amount of total liabilities after formation? a. P450,000 b. P475,000 c. P500,000 d. P525,000 e. None of the above. What amounts should be recorded as capital for Darren and Darryl at the formation of the partnership? a. P650,000 P450,000 b. P675,000 P475,000 c. P700,000 P500,000 d. P725,000 P525,000 e. None of the above What is the amount of total partners capital after the formation? a. P1,100,000 b. P1,150,000 c. P1,200,000 d. P1,250,000 e. None of the abovearrow_forward
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