Scribd Logo
Upload

Welcome to Scribd!

  • 3K views

    CH 013

    Uploaded by

    Joana Trinidad
    Paul, Melvin, and Elrick are partners sharing profits and losses in a 2:2:1 ratio. Laurence is admitted as a new 25% partner. Paul sells half his interest to Laurence for $400,000. Laurence also invests $400,000. After admission, Paul's capital is $450,000 and Elrick's share of profits/losses is now 15%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    CH 013

    Uploaded by

    Joana Trinidad
    3K views2 pages
    Paul, Melvin, and Elrick are partners sharing profits and losses in a 2:2:1 ratio. Laurence is admitted as a new 25% partner. Paul sells half his interest to Laurence for $400,000. Laurence also invests $400,000. After admission, Paul's capital is $450,000 and Elrick's share of profits/losses is now 15%.

    Original Title

    ch013

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Paul, Melvin, and Elrick are partners sharing profits and losses in a 2:2:1 ratio. Laurence is admitted as a new 25% partner. Paul sells half his interest to Laurence for $400,000. Laurence also invests $400,000. After admission, Paul's capital is $450,000 and Elrick's share of profits/losses is now 15%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    3K views2 pages

    CH 013

    Uploaded by

    Joana Trinidad
    Paul, Melvin, and Elrick are partners sharing profits and losses in a 2:2:1 ratio. Laurence is admitted as a new 25% partner. Paul sells half his interest to Laurence for $400,000. Laurence also invests $400,000. After admission, Paul's capital is $450,000 and Elrick's share of profits/losses is now 15%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    1. Paul, Melvin and Elrick are partners sharing profits and losses in the ratio of 2:2:1.

    On July
    31, 2018, their capital balances are as follows: Paul - P700,000; Melvin - P500,000; Elrick -
    P400,000. The partners agree to admit Laurence on the following conditions:
    A. Laurence is to pay Paul P400,000 for 1/2 of Paul’s interest:
    B. Laurence is also to invest P400,000 in the partnership
    C. The total interest of Laurence is 25% of the total partnership capital, which is also
    his share in the new partnership profit and loss sharing ratio. The old partners
    are sharing in their old ratio

    ● How much is Paul’s capital after the admission of Laurence?


    P450,000

    ● What is the percentage of Elrick’s share in the new profit and loss sharing ratio?
    15%

    2. A partnership agreement most likely will stipulate that assets be reappraised when
    New partner is admitted to the partnership

    3. The following transactions will affect the balance of the total partnership capital except
    Admission by purchase

    4. Ben and Ric are partners who share profits and losses in the ratio of 6:4, respectively. On
    May 1, 2019, their respective capital accounts were as follows:
    Ben P60,000
    Ric P50,000
    On that date, Lito was admitted as a partner with a one-third interest in capital and profits for
    an investment of P40,000. The new partnership began with a total capital of P150,000.
    Immediately after Lito’s admission, Ben’s capital account balance should be
    P54,000

    5. The admission of a new partner involving bonus will result in


    Bonus to either old or new, but not both

    6. Statement 1: The admission of new partner through his direct investment in the partnership
    will increase the partnership capital even under bonus method
    Statement 2: The admission of new partner through purchase of interest of existing partner
    will increase partnership capital
    Only statement 1 is true

    7. Luke and Mark, who share profits and losses equally, agree to take John into the
    partnership for a 40% share in capital and profits. Luke and Mark retain 30% interest each.
    Luke and Mark have Capital balances of P100,000 and P140,000 respectively before the
    admission of John. John pays P120,000 directly to Luke and Mark for his 40% interest. All
    assets of the partnership, except for land are fairly valued.
    ● What would be the capital balance of Mark, immediately after the admission of John?
    P102,000

    ● By how much was land undervalued?


    P60,000

    You might also like