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P 2

The partners initially agreed to equal capital accounts but the accounts were unequal. To equalize the accounts, one partner needed to invest additional funds while the other withdrew part of their investment.

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Alyanna Alcantara
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24 views

P 2

The partners initially agreed to equal capital accounts but the accounts were unequal. To equalize the accounts, one partner needed to invest additional funds while the other withdrew part of their investment.

Uploaded by

Alyanna Alcantara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Variation to bonus method – additional investment/withdrawal.

5. Use the information in problem ‘1’’. However, assume that the partners agreed to

have their capital accounts initially credited at equal amounts. A partner shall provide

additional investment (or withdrawal part of his investment) in order to equalize the

balance of the partners' capital accounts.

Mr. Sun Ms. Moon Partnership

Cash 400,000 400,000

Accounts Receivable 200,000 200,000

Land 1,000,000 1,000,000

Equipment 150,000 150,000

Total 600,000 1,150,000 1,750,000

Mortgage payable – land -250,000 -250,000

Adjusted capital

balances 600,000 900,000 1,500,000

❖ Requirement: Which partner shall make an additional investment and which partner shall
withdraw part of his/her investment?

Mr. Sun Ms. Moon

Actual contribution 600,000 900,000

Required contribution (750,000) (750,000)

(Additional investment)/Withdrawal) (150,000) 150,000

→ Answer: Mr. Sun shall invest an additional ₱150,000, while Ms. Moon shall

withdraw ₱150,000

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