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    Eric &philip

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    King Macunat
    The partnership agreement between Eric and Philip is being revised to change their profit and loss sharing ratios from 60/40 to 70/30. At the date of this change, the partnership owns a building with a book value of P350,000 but a market value of P600,000. Eric's capital account will be adjusted downward by P25,000 at the date of the change in profit and loss ratios.

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    Eric &philip

    Uploaded by

    King Macunat
    961 views4 pages
    The partnership agreement between Eric and Philip is being revised to change their profit and loss sharing ratios from 60/40 to 70/30. At the date of this change, the partnership owns a building with a book value of P350,000 but a market value of P600,000. Eric's capital account will be adjusted downward by P25,000 at the date of the change in profit and loss ratios.

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    Eric &Philip

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    The partnership agreement between Eric and Philip is being revised to change their profit and loss sharing ratios from 60/40 to 70/30. At the date of this change, the partnership owns a building with a book value of P350,000 but a market value of P600,000. Eric's capital account will be adjusted downward by P25,000 at the date of the change in profit and loss ratios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    961 views4 pages

    Eric &philip

    Uploaded by

    King Macunat
    The partnership agreement between Eric and Philip is being revised to change their profit and loss sharing ratios from 60/40 to 70/30. At the date of this change, the partnership owns a building with a book value of P350,000 but a market value of P600,000. Eric's capital account will be adjusted downward by P25,000 at the date of the change in profit and loss ratios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Eric and Philip have been partners for several years.

    During the time they have shared profits and losses


    (60/40). They are currently revising the profit and loss ratios to (70/30). Eric and Philip decide to adjust
    the capital accounts at the date of the change to reflect the difference between market value and book
    value of assets and liabilities. At the date of the change, the partnership owns a building with a book
    value of P350,000 and a market value of P600,000. How much will Eric’s capital account be adjusted at
    the date of change in the profit and loss ratios?

    Answer:

    c.

    P25,000 decrease

    Capital balances and profit and loss sharing ratios of the partners in the BIG Entertainment Gallery are as
    follows:

    Betty, capital (50%) ……………………………………………. P140,000

    Iggy, capital (30%) …………………………………………….. 160,000

    Grabby, capital (20%) ………………………………………….. 100,000

    Total …………………………………………………………… P400,000

    Betty needs money and agrees to assign half of her interest in the partnership to yessir for P90,000 cash.
    Yessir pays directly to betty. Yessir does not become a partner.

    What is the total capital of the BIG Partnership immediately after the assignment of the interest to
    Yessir?

    Answer:

    d.

    P400,000
    Jenna is about to purchase same of Cynthia’s partnership interest. Cynthia currently has partnership
    equity of P84,500. If Jenna pays Cynthia P30,000 for 30 percent of her capital, what amount will be
    recorded in the partnership accounting records?

    Answer:

    b.

    Jenna

    Cynthia

    P25,350 credit

    P25,350 debit

    Presented below is the condensed balance sheet of the partnership of KK, LL and MM who share profits
    and losses in the ratio of 6:3:1, respectively:

    Cash………………. P85,000 Liabilities……….. P80,000

    Other assets………. 415,000 KK, capital……... 252,000

    LL, capital……… 126,000

    _________ MM, capital…….. 42,000

    Total ……………… P500,000 Total …………… P500,000

    The partner agree to sell NN 20% of their respective capital and profit and loss interests for a total
    payment of P90,000. The payment by NN is to be made directly to the individual partners. The capital
    balances of KK, LL and MM, respectively after admission of NN are:
    Answer:

    b.

    P201,600

    P100,800

    P33,600

    Using the same information in No. 58, assuming that implied goodwill for revolution of asset is to be
    recorded prior to the acquisition by NN. The capitals of KK, LL, MM, respectively after admission of NN
    are:

    Answer:

    c.

    P216,000

    P108,000

    P36,000

    XX, YY and ZZ are partners who share profits and losses in the ratio of 5:3:2, respectively. They agree to
    sell a 25% of their respective capital and profits and losses ratio for a total payment directly to the
    partners in the amount of P140,000.00. They agree that goodwill or revaluation of assets of P60,000 is
    to be recorded prior to admission of AA. The condensed balance sheet of the XYZ partnership is as
    follows:

    Cash………………. P60,000 Liabilities……….. P100,000

    Non-cash assets…… 540,000 XX, capital……... 250,000

    YY, capital……… 150,000

    _________ ZZ, capital…….. 100,000


    Total ……………… P600,000 Total …………… P600,000

    The capital of XX, YY and ZZ respectively after the payment and admission of AA are:

    Answer:

    b.

    P210,000

    P126,000

    P84,000

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