Questions 7 through 9 are based on the following: A, B and C have capital balances of P112,000, P130,000 and v58,000, respectively, and share profit in the ratio 3:2:1. D invest cash in the partnership for a one-fourth interest. 7. Assume D receives a one-fourth interest in the assets of the partnership, which includes credit for P25,000 of goodwill that is recognized upon admission. How much cash D invest? a. P100,000 b. $75,000 c. P125,000 d. P50,000 8. Assume D receives a one-fourth interest in the assets of the partnership and D is credited with P20,000 of the bonus from the old partners that is recognized upon D's admission. How much cash D invest? a. P73,333 b. P100,000 c. P93,333 d. P80,000 9. Assume D receives a one-fourth interest in the assets of the partnership and B is credited with $15,000 of the bonus from D, how much cash D invest? d. c. b. a. P115,000 b. P105,000 c. P160,000 d. P120,000

Questions 7 through 9 are based on the following: A, B and C have capital balances of P112,000, P130,000 and v58,000, respectively, and share profit in the ratio 3:2:1. D invest cash in the partnership for a one-fourth interest. 7. Assume D receives a one-fourth interest in the assets of the partnership, which includes credit for P25,000 of goodwill that is recognized upon admission. How much cash D invest? a. P100,000 b. $75,000 c. P125,000 d. P50,000 8. Assume D receives a one-fourth interest in the assets of the partnership and D is credited with P20,000 of the bonus from the old partners that is recognized upon D's admission. How much cash D invest? a. P73,333 b. P100,000 c. P93,333 d. P80,000 9. Assume D receives a one-fourth interest in the assets of the partnership and B is credited with $15,000 of the bonus from D, how much cash D invest? d. c. b. a. P115,000 b. P105,000 c. P160,000 d. P120,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
Requirement: Compute for the respective shares of the partners in 3. The partnership agreement of A and B stipulates the following: Annual salaries of P100,000 for A and P60,000 for B. 20% bonus to A, based on profit after salaries and bonus. Balance is shared equally. The partnership earned profit of P520,000 before salaries and bonus. Requirement: Compute for the respective shares of the partners in the profit. 4. A and B's partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared equally. During the period, the partnership earned profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P60,000 on March 1, P40,000 on Sept. 30, and made drawings of P30,000 on Aug. 1 and P9,000 on Nov. 1. Requirement: Compute for the respective shares of the partners the profit.
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