Partnership Dissolution — Admission of Partner [41]. Mark and Valerie are partners with capitals P200,000 and P100,000 and sharing profits and losses at 3:1, respectively. They decided to admit Nora as a new pariner with a ‘50% interest in the firm, Nora invested cash of P150,000, and Mark and Valerie transferred Portions of their capitals as a bonus to Nora. After Nora's admission, Valerie's capital would be: a. P 37,500 ©. P 81,250 b. P 56,250 d, P100,000 [42]. Tito and Vie, partners sharing profits and losses equally, have capital balances of 90,000 each. Joey |s admitted as a new partner, making cash investment of P120,000, ta @ one-third interest in both capital and eamings. If Joey Is credited In full for the amounl of his investment, the new capital of the partnership would be:240,000. 200.000. 360,000. 420,000. [43], Moonbits Parmership had 2 net income of P8,000 forthe month ended September 30, 2011. Sunshine purchased an intorest in Moonbits Partnership of Liz and Dick by paying {Uz P32,000 for haf ot her capital and hail of hor 59% prof-sharing interest on October 1, 2011. Atthis time, Li's capital balance was P24,000 and Dick's capital was P6,000. Sunshine should receive capital creat equal to: a. P1z000 . P16,000 20,000 26.667 [48], Sarahis admittedinto he firm of Joy, AA and Par. The oi pariners agreed to sol to Sarah one-fourth of teirrespective equites and profit share. Sarah paid a tlal price of P1,000,000. Before Sarah's admission Joy, AA and Pla have capital balances of 2,000,000. P1,000.000 and 500,000 and they share profits a the ata of 63:1 Partnership assets are foty stated and implied goodwits tobe recogrized priori Sarah's, ‘admission. The new capita ofthe partnership is 2. PSSMb. pay ©. PSM 0, PASM {Questions 45 & 46 are basedion the folowing intormation: ‘Miz, Mare and Mert are partners sharing proftin2 63:2 rato, and witn capital balances of P95 000, PE0,C00, and P60,000, respectively, on December 31,2011, The patners decided to admit Vince as 2 new pariner on January 1,201. Vince will contribute cash of 80,000 10 the partnership and aso pay P1S,000 for 19% of Mares share. Vince's tohave a 20% share In grolits, Alter the admission of Vice, the ictal capital willbe P330,000 and Vince's capital vl be P70,000, [45]. Upon the admission of Vince, the total amount of *poodti" forthe ld partners would be: P 7,000 15,000 22,000 37,000 poge 146], After the acmission of Vince, Mares capital balance would ber 2. 72,600 b. 74.600. P79,100 1d. 81,100 [47].__The aamission ota new partner toa 20% interest fr an investment et P18,000, ‘with 2 total agreed capital ot P75,000, wrest ix: Goodwilto the old partners. Goodwal tothe new partner. Bonus tothe od partner. aoge Bonus to the new partner. [48], _ Black and White are partners who have capital balances of P600,000 and P0,000, and sharing profs i the ratio of 3:2. lve is arte as a partver upon investing 'P220,000 for a25% interest inthe fir, and profits are tebe shared equally. Given the choice between goodwilland torus methods, Blue woul: Prefer bonus method due to Bue's gain of P105,000 Prefer bonus method due to Bue's gain of P140,000, Prefer goodwil method due to Bis gain of P140,000. apogee Be inditferent fer good and bonus methods are the same. ‘Questions 42 and 50 are based en the folowing information: “Terry and Timmy entered into a partnership on May 31, 2011, contioutng cash of PA8,000‘end P32,000, respectively, and agresing to divide eamings in the ratio of their Investments after alowing annual salary allowance of P12,000 each. On December 31, 2011, the income summary eccount hada cresit balance of P34,000, while drawing ‘accounts showed debit balances of P14,000 for Terry and P10,000 for Timmy. ‘Atthe beginning of the next year, Tommy was admilted into the firm as anew partner wit a 23-13% interest for 2 capital credit equal tc his cash investment of P0,000. Teny and Timmy then effected a private cash selllemient between themselves in order to make the copital balances conform to a new profit-sharing ratio of 4:2:2, respectively, wih salary allowances scrapped. [49]. How much was the amount of goodwil It any, that wes recognizedin connection with the admission of the new partner? 20,000 24,000 30,000 36,000 [50]. How much was the amount ofthe private cash settlement effected between the old panners? 2 P5000 . P12,000 b. P3,000 ¢. P15,000[41]. Letter "0" Is the correct answer. Mark Valerie Nora Total ‘Contributed capital P200,000 F100,000 150,000 450,000 Bonus (3:1) Nora's AC P225,000 Nora's CC 150,000P 75:00 FromMak x3 (66.250) 56.250 From Valera x (18750) 18,780 ‘Agreedcapital —P143,750._P 81,250 225,000 P450,000 [42]. Loter "Cis the correct answer. Corton et Joey 120900 Aareedcapalratto v3 Teal arved captal 320,000 1S, Letter 4" the comet answer, Capt uz P24900 erst porchasedt va Copttalereettot Sunshine ——P12,000, [44]. Letter "Aris the correct answer, Saratiscontibuton —_P1,000,000 Died by interest bought one-fourth ‘etal agreed capkal —_P4,000,000 [4S]. Letter Bris the comrect answer. ‘The total amount of {poodwl" ferthe old partners is PIS,000, computed as follows: ‘Total agreed capital upon Vince's admission 330,000 Loss: Net Assets after Vince's Investment: ‘otal old parners capital 236.000 Vince's cash investment = 80,000 Tetalnet acsats 215,000 “Total ‘good forthe old partners P 15000(46). Lemer "ois the corset answer, Marc's capital balance, after Vince admission Is P79,100, comptted 2s follows: *Merc's interest purchased ‘by Vince P80,000%15%) -P12,000 Vince's cash investment 180,000 ‘Vince capa crectt (70.000) Bonus to old partners 22,000 ‘Mae's captal (before Vines admission) 80,000 Intorest purchased by Vince (12,600) ‘Share n good P15,000x30%) 4800 ‘Share n borus °P 22,000 x 30%) 6600 Marc's captal(tter Vince admission) 79,100 [47]. Letters the comrect answer. ‘The acinission of 2 new partner to a 20% Interest in a partnership for an investment ‘of P18,000, with total agreed captal to be P75,000 resuted to a bonus to old partners of P3,000 computed as falows: New partner Investment 18,000 Less: New partnes capital credit (F78,000 x 20%) 15.000 Bonus to oid partners P 3.000 [48]. Letter #1 the correct answer. Given the choice between goodwil and bonus methods, Bue will profer bonus method due to Blue's gain of PIOS,000, computed as folows: G-Methed —B-Method Blue's copta cect(1,080,000, 75%) x 25% 360,000 ('1.080,000,°220,000) «25% 325,000 Less: Bes Investment 220,000 220,000 GoodwivBonus for Bua 140,000 105,000 Less: Sharan subsequent GW ‘wete-off (U3) ager - Blue's gah P9333 P105,000 [Note that ifthe onty Immediate etfect is considered, the “goodull™ method would be ‘referable; but since goo, by Rset is non-realizable, the cver-al effect would faver the bonus" method. [49]. Lotto "Is tho corract anewor. ‘The amount of good that was recognized In connection withthe admission of the new partner was P30,000, computed as flows: "New captal implied trom new partner's Ivestment Pso.000/ 33 V3% 180.000 Less: Resulting assets after new partner's Rvestment: CCriginal partners investment 80,000 Net income 34,000 Drawings (24,000) New parmers Investment 160,000 150,000 |meled goodval for criginal partners) P 30,000 [50]. LeterB*Isthe correct answer. ‘The amount of the private cash settement etfected between the oid partners was 9,000, computed as follows: Total = Tomy Timmy TommyMay 31 Investments —_ P 80,000 48,000 32,000 Net Income: Salaries 14,000 7,000 7,000 Balance at $2 20,000 12,000 8,000 Drawings: ( 24,000) (14,000) (10,000) - December 31 balances P 90,000 P53,000 P37,000 Investment 60,000 - - 60,000 Implied goodwill 30,000 18,000 12,000 Balances after admission of new partner 180,000 71,000 P49,000 + P60,000 Desired balances, 4:3:2 160,000 80,000 40,000 60,000 Private settlernent P 9,000 P('9,000) ‘Timmy will transfer P9,000 of his capital to Terry.