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Long Quiz 1 BA 99.2 Solutions and Answers

The document outlines various partnership scenarios involving capital contributions, profit-sharing ratios, and the admission of new partners using the bonus method. It includes calculations for total agreed capital, adjustments for existing partners, and the resulting capital balances after new investments. Specific examples illustrate how to allocate income and compute ending capital balances for partners A, B, C, and D.

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Marielle Anima
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16 views

Long Quiz 1 BA 99.2 Solutions and Answers

The document outlines various partnership scenarios involving capital contributions, profit-sharing ratios, and the admission of new partners using the bonus method. It includes calculations for total agreed capital, adjustments for existing partners, and the resulting capital balances after new investments. Specific examples illustrate how to allocate income and compute ending capital balances for partners A, B, C, and D.

Uploaded by

Marielle Anima
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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1. Apple and Pen are partners with capital balances of 300,000 and 100,000, respectively.

Profits and losses are divided in


Apple and Pen decided to admit Pine who invested land valued at 75,000 for a 20% capital interest in the new partnership
The partnership elected to use the bonus method to record the admission of Pine. Compute for the total agreed capital. __
TIC Adjustments TAC
Apple 300,000.00 - 12,000.00 288,000.00
Pen 100,000.00 - 8,000.00 92,000.00
Pine 75,000.00 20,000.00 95,000.00
475,000.00 475,000.00

2. Assume the existing capital of a partnership is P100,000. Two partners currently own the partnership and split profits 40
A new partner is to be admitted and will contribute net assets with a fair value of P50,000. An appraisal of existing partner
by P10,000, inventory overstated by P12,000 and land understated by P25,000. What is the total capital of the new partne
- 10,000.00
- 12,000.00 A
25,000.00 overstated -
Revaluation 3,000.00 understated +
Old Partners' Capital 100,000.00 overstated
Investment of New Partner 50,000.00 understated
153,000.00

3. A, B, and C are partners with present capital balances of P40,000, P50,000, and P20,000, respectively. The partners shar
percentages: 60% for A, 30% for B, and 10% for C. D is to join the partnership upon contributing P40,000 to the partnershi
An appraisal of the existing partnerships' assets reveals the following: Accounts Receivable P20,000 overvalued Inventory
Calculate the capital balances for each individual in the new partnership assuming use of the bonus method. (2 points for e
____________________________________________________________
TIC Adjustments TAC
A 37,000.00 2,250.00 39,250.00
B 48,500.00 1,125.00 49,625.00
C 19,500.00 375.00 19,875.00
D 40,000.00 3,750.00 36,250.00
145,000.00 145,000.00 Revaluation
4. C is admitted to A & B Partnership under the bonus method. C contributes cash of P20,000 and non-cash assets with a m
exchange for a 20% ownership interest in the new partnership. Prior to the admission of C, the capital of the existing partn
partnership net assets were fairly stated. A & B shared profits and losses at a ratio of 80/20, respectively. What is the bonu

Old Capital 130,000.00


Investment of New Partner 50,000.00 14,000.00 36,000.00
TIC 180,000.00 180,000.00
Required (2 points per item):
a. Allocate the income to partners A and B. ______________________________
b. Compute for the ending capital balances of the partners. ______________________________
ly. Profits and losses are divided in the ratio of 6:4.
ital interest in the new partnership. Pine’s cost of the land was 60,000.
mpute for the total agreed capital. _______________

the partnership and split profits 40/60.


00. An appraisal of existing partnership assets indicates accounts receivable overstated
s the total capital of the new partnership if the bonus method is being used? _______________

= L OE
-
+
- +
+ -

000, respectively. The partners share profits and losses according to the following
ntributing P40,000 to the partnership in exchange for a 25% interest in capital and a 20% interest in profits and losses.
able P20,000 overvalued Inventory P10,000 overvalued Land P10,000 undervalued Building P15,000 undervalued.
of the bonus method. (2 points for each capital balance)

- 20,000.00
- 10,000.00
10,000.00
15,000.00
- 5,000.00
20,000 and non-cash assets with a market value of P30,000 and book value of P15,000 in
of C, the capital of the existing partnership was P130,000 and an appraisal showed the
0/20, respectively. What is the bonus amount to be recorded? _______________

A B TOTAL
Salaries 40,000.00 50,000.00 90,000.00
Interest 6,708.33 7,350.00 14,058.33
Bonus 13,313.00 13,313.00
Residual 4,577.20 3,051.47 7,628.67
64,598.53 60,401.47 125,000.00
A B 110,941.67
75,000.00 100,000.00
Mar-01 25,000.00
Oct-01 20,000.00
WAC 95,833.33 105,000.00
Ending Bal. 154,198.53 170,001.47
B=12%(NI-I)
B=12%(110,941.67)
13,313.00 BONUS

Total Withdrawals 10,400.00

5.a A: 64,598 B: 60,402


5.b A: 154,198 B: 170,002
475,000.00

153,000.00

s and losses.

A: 39,250 B: 49,625 C: 19,875 D: 36,250


8 B: 170,002

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