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Partnership Business Essay

3342 words - 14 pages

Partnership – Basic Considerations and Formation 1

CHAPTER 1

MULTIPLE CHOICE ANSWERS AND SOLUTIONS

1-1: a
Jose's capital should be credited for the market value of the computer contributed by him.
1-2: b (40,000 + 80,000) ÷ 2/3 = 180,000 x 1/3 = 60,000.
1-2: c

1-3: a
Cash P100,000
Land 300,000
Mortgage payable (  50,000)

Net assets (Julio, capital) P350,000

1-4: b
Total Capital (P300,000/60%) P500,000
Perla's interest ______40%

Perla's capital P200,000
Less: Non-cash asset contributed at market value
Land P 70,000
Building 90,000
Mortgage Payable (  40,000) _120,000

Cash contribution ...view middle of the document...

Arce:
Cash P 20,000
Merchandise __10,000 __30,000

Total assets of the partnership P 74,000

4 Chapter 1

1-16: a
Cash to be invested by Mendez:
Adjusted capital of Lopez (2/3)
Unadjusted capital P158,400
Adjustments:
Prepaid expenses 17,500
Accrued expenses (   5,000)
Allowance for bad debts (5% X P100,000) _(   5,000)

Adjusted capital P165,900

Total partnership capital (P165,900/2/3) P248,850
Multiply by Mendez's interest ⅓

Mendez's capital P 82,950
Less Merchandise contributed __50,000

Cash to be invested by Mendez P 32,950

Total Capital:
Adjusted capital of Lopez P165,900
Contributed capital of Mendez __82,950

Total capital P248,850
1-17: d
Moran, capital (40%)
Cash P 15,000
Furniture and Fixtures _100,000 P115,000
Divide by Moran's P & L share percentage ______40%

Total partnership capital P287,500
Multiply by Nakar's P & L share percentage ______60%

Required capital of credit of Nakar: P172,500
Contributed capital of Nakar:
Merchandise inventory P 45,000
Land 15,000
Building __65,000

Total assets P125,000
Less Liabilities __30,000 P 95,000

Required cash investment by Nakar P 77,500

1-18: c
Garcia's adjusted capital (see schedule 1) P40,500
Divide by Garcia's P & L share percentage ______40%

Total partnership capital P101,250
Flores' P & L share percentage ______60%

Flores' capital credit P 60,750
Flores' contributed capital (see schedule 2) __43,500

Additional cash to be invested by Flores P 17,250
Partnership – Basic Considerations and Formation 5

Schedule 1:
Garcia, capital:
Unadjusted balance P 49,500
Adjustments:
Accumulated depreciation (   4,500)
Allowance for doubtful account (   4,500)

Adjusted balance P 40,500

Schedule 2:
Flores capital:
Unadjusted balance P 57,000
Adjustments:
Accumulated depreciation (   1,500)
Allowance for doubtful accounts (  12,000)

Adjusted balance P 43,500
1-19: d
Ortiz Ponce Total

(     60%) (     40%)
Unadjusted capital balances P133,000 P108,000 P241,000
Adjustments:
Allowance for bad debts (   2,700) (   1,800) (   4,500)
Inventories 3,000 2,000 5,000
Accrued expenses _(   2,400) (   1,600) (   4,000)

Adjusted capital balances P130,900 P106,000 P237,500

Total capital before the formation of the new partnership (see above) P237,500
Divide by the total percentage share of Ortiz and Ponce (50% + 30%) ______80%

Total capital of the partnership before the admission of Roxas P296,875
Multiply by Roxas' interest ______20%

Cash to be invested by Roxas P  59,375

1-20: d
Merchandise to be invested by Gomez:
Total partnership capital (P180,000/60%) ...

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