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Urdaneta City University: Owned and Operated by The City Government of Urdaneta

Frostfell Airlines is expected to pay an upcoming dividend of P3.29. The company's dividend is expected to grow at a steady, constant rate of 5% well into the future. Frostfell currently has 1,600,000 shares of common stock outstanding. If the required rate of return for Frostfell is 12%, what is the best estimate for the current price of Frostfell's common stock

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Ben Vallecer Espiritu Jr.
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186 views

Urdaneta City University: Owned and Operated by The City Government of Urdaneta

Frostfell Airlines is expected to pay an upcoming dividend of P3.29. The company's dividend is expected to grow at a steady, constant rate of 5% well into the future. Frostfell currently has 1,600,000 shares of common stock outstanding. If the required rate of return for Frostfell is 12%, what is the best estimate for the current price of Frostfell's common stock

Uploaded by

Ben Vallecer Espiritu Jr.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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URDANETA CITY

UNIVERSITY
Owned and operated by the City Government of Urdaneta

Competency Appraisal
Advanced Financial Accounting and Reporting (AFAR)
Partnership Accounting
(Partnership’s Dissolution)
May 11, 2022 – (2)

Problem 1

The following information pertains to ABC Partnership of Alonzo, Bryan, and


Carlo:

Alonzo, Capital (20%) P 200,000


Bryan, Capital (30%) 200,000
Carlo, Capital (50%) 300,000

On this date, the partners agreed to admit Devine into the partnership. Assuming
Devine purchased fifty percent of the partners’ capital and pays P500,000 to the old
partners, how would this amount be distributed to them?

Solution:
Alonzo Bryan Carlo
½ of the capital 100,000 100,000 150,000
30,000 45,000 75,000
Total 130,000 145,000 225,000

Problem 2

The following balance sheet is presented for the partnership of A, B, and C, who
share profits and losses in the ratio of 5:3:2.

Assets Liabilities and Capital


Cash 120,000 Liabilities 280,000
(075) 600 - 1507
San Vicente West, Urdaneta City, Pangasinan
Bright future starts here 1 ucu.edu.ph | [email protected]
URDANETA CITY
UNIVERSITY
Owned and operated by the City Government of Urdaneta

Assume that assets and liabilities


Other Assets are fairly
1,080,000 valued on the balance sheet, and
A, Capital the
560,000
partnership decided to admit D as a new B, partner
Capitalwith a one-fifth interest 320,000
and no
bonus is to be recorded. How much should D contribute
C, Capital in cash or other assets?
40,000
Total 1,200,000 Total 1,200,000
Total Capital of the Old Partners 920,000
4/5
Total Partnership Capital 1,150,000
1/5
Cash Investment of D 230,000

Problem 3

The capital balances of DEA Partnership are: D, Capital – P60,000; E, Capital –


P50,000; and A, Capital – P40,000 and income ratios are: 5:3:2, respectively. The
DEAR Partnership is formed by admitting R to the firm with cash investment of
P60,000 for a 25% interest in capital. What is the amount of bonus to be credited to
A, Capital in admitting R?

Contributed Agreed Increase


Capital Capital (Decrease)
Old Partners 150,000 157,500 7,500
New Partner 60,000 (210,000 x 25%)
52,500 (7,500)
210,000 210,000
Bonus to be credited to Partner A 1,500

Prepared by:

REMEDIOS A. PALAGANAS, CPA, MBA


Assistant Professor IV

(075) 600 - 1507


San Vicente West, Urdaneta City, Pangasinan
Bright future starts here 2 ucu.edu.ph | [email protected]

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