Problem #4

Ruth and Anna form a new partnership. Ruth invests P3million in cash for her 60% interest in the capital and profits of the bus
and a market of Php700,000; and a building that has a tax basis of Php500,000 and a market value of Php900,000. The buil
assume. What amount of cash should Anna contribute?

Solution:

Investment Amount Profit Allocation

Ruth Cash 3,000,000 60%
Anna Cash ? 40%
Land 700,000
Building 500,000

₱3,000,000
₱3,000,000 ₱700,000
/60% ₱500,000
₱5,000,000 ₱4,200,000

₱5,000,000
-4,200,000
₱800,000

Problem #8

Kay and Dali entered into a partnership on June 18, 2018 by investing the following assets:

Accounts Kay Dali

Cash Php 30,000 Php –
Merchandise
- 90,000
inventory
Computer
- 160,000
equipment
Furniture and
200,000
fixtures

Solution:
Kay Dali
Cash ₱30,000
Furniture ₱200,000
Merchandise ₱90,000
Equipment ₱100,000
 Total ₱230,000 ₱190,000

Cash 420,000
x 40%
₱168,000

Problem #10

On June 18, 2018, Tried admits Me for an interest in his business. On this date, Tried’s capital account shows a balance of Ph
the partnership:

1.     prepaid expenses of Php 17,500 and accrued expenses of Php5,000 are to be recognized.

2.   5% of the outstanding accounts receivable of Tried amounting to Php100,000 is to be recognized as uncollectibles.

3.  Partner Me is be credited with a 1/3 interest in the partnership and is to invest cash aside from the Php50,000 worth of merch

Required: compute the amount of cash to be invested by partner Me and the total capital of the partnership and prepare journa
close the accounts.

Solution:
Tried's Capital ₱158,400 ME Investment

Total Capital 158,400 ME Capital

x3/2
₱237,600

Problem #12

Esau and Jacob are partners sharing profits in this proportion – 60:40. A balance sheet prepared for the p

Assets Liabilities & Capital

Cash Php 480,000 Accounts payable

Accounts
920,000 Esau, capital
receivable
Inventories 1,650,000 Jacob, capital
Equipment 700,000
Accumulated
-450,000
depreciation
Total liabilities &
Total assets Php 3,300,000
capital

On this date, the partners agree to admit Isaac as a partner. The terms of the agreement are summarized below. Assets and liab
1. An allowance for possible uncollectibles of Php45,000 is to be established.
2. Inventories are to be restated at their present replacement value of Php1,700,000.
3. Accrued expenses of Php40,000 are to be recognized.

Solution: Solution:
Assets ₱3,300,000
Bad Debts -45,000
Inventories ₱50,000
Accrued Expense -40,000
Total Assets ₱3,265,000

Cash ₱653,000
Isaac's Capital

Problem #15

Reuben admits Judah for a partnership interest in his business. The balance sheet accounts of Reuben of June 2

Cash Php ? Accounts payable

Accounts receivable 960,000 Reuben, capital

Merchandise inventory 1,440,000

It is agreed that for purposes of establishing Reuben’s interest, the following adjustments should be made: (1) an allowance fo
merchandise inventory is to be valued at Php1,600,000; and (3) prepaid expenses of Php52,000 and accrued expenses of Php 3
give him a 1/3 interest in the total capital of the firm. What is the capital balance of Reuben

Solution:
1
A/R ₱960,000
Bad Debts 2% -19,200
A/R ₱940,800

2
Merchandise Invent ₱1.600,000

3
Prepaid Expense ₱52,000
Accrued Expense ₱32,000
20,000
apital and profits of the business. Anna contributes land that has an original cost of Php 400,000
e of Php900,000. The building is subject to a Php400,000 mortgage that the partnership will
h should Anna contribute?

ollowing assets:
The agreement between Kay and Dali provides that profits and losses are to be
divided into 40% to Kay and 60% to Dali, and that the partnership is to assume a
liability on the computer equipment of Php60,000. The partners further agree that
Dali is to receive a capital credit equal to her profit and loss ratio. How much
cash is to be invested by Dali?
ount shows a balance of Php158,400. The following were agreed upon before the formation of
rship:

as uncollectibles.

Php50,000 worth of merchandise.

tnership and prepare journal entries in the books of the partnership and in the books of Tried to
ccounts.

237,600
-158,400
₱79,200

ce sheet prepared for the partners on June 21, 2018:

Liabilities & Capital Esau, Jacob and Isaac will divide profits in the ratio
after the formation of the new partnership are to be i
Jacob making cash settlement between themselves
Php 890,000 capitals and Isaac investing cash in the partnership
invested by Is
1,330,000

1,080,000

Php 3,300,000

zed below. Assets and liabilities are to be restated as follows:

 Esau 5 ₱1,632,500
Jacob 3 ₱979,500
Isaac 2 ₱653,000
Total Capital ₱3,265,000

₱653,000

counts of Reuben of June 21, 2018 prior to the admission of Judah are as follows:

Php496,000

made: (1) an allowance for bad debts of 2% of accounts receivable is to be established; (2) the
d accrued expenses of Php 32,000 are to be recognized. Judah invested cash of Php1,136,400 to
e capital balance of Reuben and after the admission of Judah?

A/R ₱940,800
Merchandise Inventory ₱1,600,000
Prepaid Expense ₱20,000
Account Payable -496,000
Total Asset ₱2,064,800
Judah's Capital 1,136,400
₱3,201,200
x 1/3
Reuben's Capital ₱1,067,066.67
profits and losses are to be
e partnership is to assume a
he partners further agree that
and loss ratio. How much
li?
 c will divide profits in the ratio of 5:3:2. Capital balances of the partners
the new partnership are to be in the aforementioned ratio, with Esau and
settlement between themselves outside of the partnership to adjust their
nvesting cash in the partnership for his interest. How much cash is to be
invested by Isaac?