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    202 Cases Partnership Dissolution

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    Anonymous LusWvy
    The document provides details on two partnership cases involving changes in capital contributions and interests over multiple years: 1) The MI partnership had changes in 2016-2017 with the admission of a new partner Lorna, and again in 2018 with the admission of Omiberto. Net income and losses were reported along with partner withdrawals each year. 2) The FBH partnership had the admission of a new partner Gladness in exchange for a capital contribution. The partnership assets were also revalued, resulting in an undervaluation amount. The capital balances of the original partners needed to be determined after Gladness joined.

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    202 Cases Partnership Dissolution

    Uploaded by

    Anonymous LusWvy
    153 views1 page
    The document provides details on two partnership cases involving changes in capital contributions and interests over multiple years: 1) The MI partnership had changes in 2016-2017 with the admission of a new partner Lorna, and again in 2018 with the admission of Omiberto. Net income and losses were reported along with partner withdrawals each year. 2) The FBH partnership had the admission of a new partner Gladness in exchange for a capital contribution. The partnership assets were also revalued, resulting in an undervaluation amount. The capital balances of the original partners needed to be determined after Gladness joined.

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    The document provides details on two partnership cases involving changes in capital contributions and interests over multiple years: 1) The MI partnership had changes in 2016-2017 with the admission of a new partner Lorna, and again in 2018 with the admission of Omiberto. Net income and losses were reported along with partner withdrawals each year. 2) The FBH partnership had the admission of a new partner Gladness in exchange for a capital contribution. The partnership assets were also revalued, resulting in an undervaluation amount. The capital balances of the original partners needed to be determined after Gladness joined.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    153 views1 page

    202 Cases Partnership Dissolution

    Uploaded by

    Anonymous LusWvy
    The document provides details on two partnership cases involving changes in capital contributions and interests over multiple years: 1) The MI partnership had changes in 2016-2017 with the admission of a new partner Lorna, and again in 2018 with the admission of Omiberto. Net income and losses were reported along with partner withdrawals each year. 2) The FBH partnership had the admission of a new partner Gladness in exchange for a capital contribution. The partnership assets were also revalued, resulting in an undervaluation amount. The capital balances of the original partners needed to be determined after Gladness joined.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    Accounting 202 (by RRDO)

    PARTNERSHIP DISSOLUTION

    Illustrative Cases: Supply what is required by the problem.

    CASE 1 Comprehensive Problem. On January 1, 2016, Manuelo and Ingrid formed MI


    partnership upon capital contribution of P12,000,000 and P8,000,000 respectively with capital
    interest ratio of 3:7. Based on the articles of co-partnership, they agreed to bring their capital
    balances in accordance with their capital interest ratio without the necessity of withdrawals or
    additional investment because Ingrid contributed special skills. The articles of co-partnership
    provides that profit or loss shall be distributed under the following terms:

    40,000 monthly salary for Manuelo and 60,000 monthly salary for Ingrid.
    The remainder on the basis of capital interest ratio.

    For the year ended December 31,2016, the partnership reported net income of P500,000.
    During 2016, the partners regularly withdraw 20% of their monthly salary.

    On January 1, 2017, Lorna was admitted to the newly formed MIL partnership by paying
    personally the partners in the amount of P6,000,000 for 20% of their capital interest. As a
    result of the dissolution, the new MIL partnership fully amended the profit or loss agreement.
    Lorna will have 20% share in the profit or loss while the original partners will share on the
    remainder based on their original capital interest ratio.

    For the year ended December 31, 2017, the partnership reported a net loss of P1,000,000.
    Manuelo, Ingrid and Lorna made P200,000, P300,000, and P400,000 withdrawals,
    respectively during 2017.

    On January 1, 2018, Omiberto was admitted to the newly formed MILO Partnership by investing
    P4,000,000 for 25% interest in the partnership. The new articles of co-partnership provides
    that the new agreed capitalization should be P20,000,000. The profit or loss agreement was also
    fully amended and will be in the ratio of 3:2:4:1 respectively for Manuelo, Ingrid, Lorna, and
    Omiberto.

    For the year ended December 31, 2018, the partnership reported net income of P2,000,000.
    Manuelo, Ingrid, Lorna, and Omiberto made P500,000, P200,000, P300,000, and P400,000
    withdrawals respectively.

    On January 1, 2019, Ingrid retires from the partnership with the partnership paying P6,000,000
    cash and a company car costing P5,000,000 in the books but has a fair value of P2,000,000.

    REQUIRED: Journalize the transactions from 2016 to 2019.

    CASE 2 Asset Revaluation and Bonus. Felicity (60%), Blissfulness (20%) and Happiness
    (20%) are partners with present capital balances of P60,000, 72,000, and 24,000 respectively.
    Gladness is to join the partnership upon contributing P72,000 to the partnership in exchange
    for a 25% interest in capital and a 20% interest in profit and losses. The existing assets of the
    original partnership are undervalued by 26,400. The original partners will share the balances of
    profits and losses in proportion to their original percentages.

    REQUIRED: What are the capital balances of the partners after the admission of Gladness?

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