Partnership Partners hip – Basic Considerations Consider ations and Formation
1
CHAPTER 1 MULTIPLE CHOICE ANSWERS AND SOLUTIONs 1-1: a
1-2: b 1-2: c
Jose's capital should be credited for the market value of the computer contributed by him. (40,000 + 80,000) ÷ 2/3 = 180,000 x 1/3 = 60,000.
1-3: a
Cash Land Mortgage payable
P100,000 300,000 ( 50,000)
Net assets (Julio, capital)
P350,000
1-4: b
1-5: d
Total Capital (P300,000/60%) Perla's interest
P500,000 ______40%
Perla's capital Less:Non-cash asset contributed at market value Land P 70,000 Building 90,000 Mortgage Payable ( 40,000)
P200,000
Cash contribution
P 80,000
_120,000
- Zero, because under the bonus method, a transfer of capital is only required.
1-6: b
Cash Inventory Building Equipment Mortgage payable Net asset (capital)
Reyes
Santos
P200,000 – –
P300,000 150,000 400,000 150,000 ( 100,000)
________ P350,000
P750,000
1-7: c
AA
BB
CC
P55,000 P55,000
Cash Property at Market Value Mortgage payable Equipment at Market Value
P 50,000
_______
P 80,000 ( 35,000) _______
Capital
P 50,000
P 45,000
2 Chapter 1
1-8: a PP
RR
SS
Cash Computer at Market Value
P 50,000 __25,000
P 80,000 _______
P 25,000 __60,000
Capital
P 75,000
P 80,000
P 85,000
Maria
Nora
1-9: c Cash Merchandise inventory Computer equipment Liability Furniture and Fixtures
P 30,000 P 90,000 160,000 ( 60,000) ________
200,000
Total contribution
P230,000
Total agreed capital (P230,000/40%) Nora's interest
P190,000 P575,000 ______60%
Nora's agreed capital Less: investment
P345,000 190,000
Cash to be invested
P155,000
1-10: d Roy
Cash Office Equipment Note payable Net asset invested Agr Agree eed d cap capita itals, equal qually ly (P30 (P300, 0,00 000/ 0/3) 3) =
P140,000 – ________ P140,000
Sam
– P220,000 _( 60,000) P160,000
P100, 100,00 000 0
1-11: a Lara
Cash Computer equipment Note payable Net asset invested Goodwill (P240,000 - P130,000) =
Mitra
P130,000 – ________
P200,000 50,000 _( 10,000 )
P130,000
P240,000
P110,000
1-12: a Perez
Cash Office Equipment Merchandise Furniture Notes payable
P 50,000 30,000 – _______
Reyes
P 70,000 – 110,000 100,000 ( 50,000)
Tim
– – ______ P
–
2 Chapter 1
1-8: a PP
RR
SS
Cash Computer at Market Value
P 50,000 __25,000
P 80,000 _______
P 25,000 __60,000
Capital
P 75,000
P 80,000
P 85,000
Maria
Nora
1-9: c Cash Merchandise inventory Computer equipment Liability Furniture and Fixtures
P 30,000 P 90,000 160,000 ( 60,000) ________
200,000
Total contribution
P230,000
Total agreed capital (P230,000/40%) Nora's interest
P190,000 P575,000 ______60%
Nora's agreed capital Less: investment
P345,000 190,000
Cash to be invested
P155,000
1-10: d Roy
Cash Office Equipment Note payable Net asset invested Agr Agree eed d cap capita itals, equal qually ly (P30 (P300, 0,00 000/ 0/3) 3) =
P140,000 – ________ P140,000
Sam
– P220,000 _( 60,000) P160,000
P100, 100,00 000 0
1-11: a Lara
Cash Computer equipment Note payable Net asset invested Goodwill (P240,000 - P130,000) =
Mitra
P130,000 – ________
P200,000 50,000 _( 10,000 )
P130,000
P240,000
P110,000
1-12: a Perez
Cash Office Equipment Merchandise Furniture Notes payable
P 50,000 30,000 – _______
Reyes
P 70,000 – 110,000 100,000 ( 50,000)
Tim
– – ______ P
–
Net asset invested Partnership Partners hip – Basic Considerations Consider ations and Formation
P 80,000
P230,000
3
Bonus Method: Total capital (net asset invested)
P310,000
Goodwill Method: Net assets invested Add: Goodwill (P230,000-P80,000)
P310,000 _150,000
Net capital
P460,000
1-13: b
Required capital of of ea each pa partner (P (P300,000/2) Contributed capital of Ruiz: Total assets P105,000 Less Liabilities __15,000
P150,000
Cash to be contributed by Ruiz
P 60,000
__90,000
1-14: d
Total assets: Cash Machinery Building Less: Liabilities (Mortgage payable)
P 70,000 75,000 _225,000
P370,000 __90,000
Net assets (e (equal to Ferrer's capital account) Divide by Ferrer's P & L share percentage
P280,000 ____70%
Total partnership capital
P400,000
Required capital of Cruz (P400,000 X 30%) Less Assets already contributed: Cash P 30,000 Machinery and equipment 25,000 Furniture and fixtures __10,000
P120,000
Cash to be invested by Cruz
P 55,000
__65,000
1-15: d
Adjusted assets of C Borja Cash P 2,500 Accounts Receivable (P10,000-P500) 9,500 Merchandise inventory (P15,000-P3,000) 12,000 Fixtures __20,000 Asset contributed by D. Arce: Cash P 20,000 Merchandise __10,000
__30,000
Total assets of the partnership
P 74,000
P 44,000
4 Chapter 1
1-16: a
Cash to be invested by Mendez: Adjusted capital of Lopez (2/3) Unadjusted capital Adjustments: Prepaid expenses Accrued expenses Allowance for bad debts (5% X P100,000)
P158,400 17,500 ( 5,000) _( 5,000)
Adjusted capital
P165,900
Total partnership capital (P165,900/2/3) Multiply by Mendez's interest
P248,850 ⅓
Mendez's capital Less Merchandise contributed
P 82,950 __50,000
Cash to be invested by Mendez
P 32,950
Total Capital: Adjusted capital of Lopez Contributed capital of Mendez
P165,900 __82,950
Total capital
P248,850
1-17: d
Moran, capital (40%) Cash Furniture and Fixtures Divide by Moran's P & L share percentage
P 15,000 _100,000
Total partnership capital Multiply by Nakar's P & L share percentage Required capital of credit of Nakar: Contributed capital of Nakar: Merchandise inventory Land Building Total assets Less Liabilities Required cash investment by Nakar
P115,000 ______40% P287,500 ______60% P172,500
P 45,000 15,000 __65,000 P125,000 __30,000
P 95,000 P 77,500
1-18: c
Garcia's adjusted capital (see schedule 1) Divide by Garcia's P & L share percentage
P40,500 ______40%
Total partnership capital Flores' P & L share percentage
P101,250 ______60%
Flores' capital credit
P 60,750
