Kern and Pate are partners with capital balances of 60,000 and 20,000, respectively.

Profits and losses are divided in the ratio of 60:40. Kern and Pate decided to form a new
partnership with Grant, who invested land valued at 15,000 for a 20% capital interest in
the new partnership. Grant’s cost of the land was 12,000. The partnership elected to use
the bonus method to record the admission of Grant into the partnership. Grant’s capital
account should be credited for 19,000
In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
If A is the total capital of a partnership before the admission of a new partner, B is the total
capital of the partnership after the admission of the new partner, C is the amount of the new
partner's investment, and D is the amount of capital credited to the new partner, then there is:  a
bonus to the new partner if B = A + C and D > C.

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. David invests 40,000 for a one-fifth interest in the total
capital of 220,000. What are the capital balances of Allen and Daniel after David is admitted into
the partnership? 137,000 39,000
Fernando and Jose are partners with capital balances of 30,000 and 70,000, respectively.
Fernando has a 30% interest in profits and losses. All assets of the partnership are at fair market
value except equipment with book value of 300,000 and fair market value of 320,000. At this
time, the partnership has decided to admit Rosa and Linda as new partners. Rosa contributes cash
of 55,000 for a 20% interest in capital and a 30% interest in profits and losses. Linda contributes
cash of 10,000 and an equipment with a fair market value of 50,000 for a 25% interest in capital
and a 35% interest in profits and losses. Linda is also bringing special expertise and clients
contact into the new partnership.
Using the goodwill method, what is the amount of goodwill traceable to the original partners
(this is for reference purposes only, the goodwill method in partnership is no longer allowed)?
31,250

When a new partner is admitted into a partnership and the new partner receives a
capital credit greater than the tangible assets contributed, which of the following
explains the difference? II only
I. The old partners' goodwill is being recognized.
II.  The new partner's goodwill is being recognized

The partnership of Cat and Dog provides for 3:2 sharing in profits and losses. Prior to
the admission of a third partners Elf, the capital accounts are Cat, 120,000 and Dog,
 80,000. Elf, 50,000 for a 75,000 interests and partners agreed that the net assets of the
new partnership would be 300,000. 
How much is Dog’s capital in the new partnership? 90,000

The capital balances in DEA Partnership are: D, capital 60,000; E, capital 50,000; and A,
capital 40,000 and income ratios are: 5:3:5, respectively. The DEAR Partnership is formed
by admitting R to the firm with cash investment of 60,000 for a 25% interest in capital.
What is the amount of bonus to be credited to A capital in admitting R? 1,500

Pol and Mall are partners with capitals of 200,000 and 100,000 and sharing profits and
losses 3:1 respectively. They agree to admit Kent as partner, Kent invests 150,000 for
a 50% interests in the firm. Pal and Mall transfer part of their capitals to Kent as a
bonus.
 
The capital balances of the partners after Kenth’s are:
Pal, 143,750; Mall, 81,250; and Kent, 225,000

Partnership A has an existing capital of 70,000. Two partners currently own the
partnership and split profits 50/50. A new partner is to be admitted and will contribute
net assets with a fair value of 90,000. For no goodwill or bonus (depending on whichever
method is used) to be recognized, what is the interest in the partnership granted the new
partner? 56.25%

In the ABC partnership (to which Daniel seeks admittance), the capital balances of
Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:

Albert 500,000
Bert 300,000
Conell 200,000

 
Based on the preceding information, what amount of goodwill will be recorded if Daniel invests
P450,000 for a one-third interest 50,000

NN, OO and PP are partners with present capital balances of 50,000, 60,000 and
20,000, respectively. The partners share profits and losses according to the following
percentages; 60% for NN, 20% for OO, and 20% for PP, QQ is to join the partnership
upon contributing 20,000 cash, plus a machine with a fair market value of 40,000 to
the partnership in exchange for a 25% interests in the capital and a 20% interests in
 the profits and losses. The existing assets of the original partnership are undervalued
by 22,000. The original partners will share the balances of profits and losses in their
original ratios.
 
Calculate the capital balances of each partner in the new partnership using goodwill method.
80,000 70,000 30,000 60,000

Pol and Loc are partners with capitals of 200,000 and 100,000 and sharing profits and
losses 3:1 respectively. They agree to admit Chic as partners. Chic invests 125,000 for
a 25% interests in the firm. Parties agree that the total firm capital after Chic’s
admission is to be 425,000.
 
The capital balances of the partners after Chic’s admission are: Pol, 214,602.50; Loc,
104,687.50 and Chic, 106,250.00

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. David directly purchases a one-fifth interest by paying
Allen 34,000 and Daniel 10,000. The land account is increased before David is admitted. What
are the capital balances of Allen and Daniel after David is admitted into the partnership 170,000
50,000

A summary balance sheet for the McCune, Nall, and Oakley partnership appears below.
McCune, Nall, and Oakley share profits and losses in a ratio of 2:3:5, respectively.
 
   
Assets  
Cash 50,000
Inventory 62,500
Marketable securities 100,000
Land 50,000
Building-net 250,000
Total assets 512,500
   
Equities  
McCune, capital 212,500
Nall, capital 200,000
Oakely, capital 100,000
Total equities 512,500
 
The partners agree to admit Pavic for a one-fifth interest. The fair market value of
partnership land is appraised at 100,000 and the fair market value of inventory is 87,500.
The assets are to be revalued prior to the admission of Pavic and there is unrcorded asset
amounting to 15,000.

How much cash must Pavic invest to acquire a one-fifth interest? 150,625

In the ABC partnership (to which Daniel seeks admittance), the capital balances of
Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:
Albert 500,000
Bert 300,000
Conell 200,000
 
Based on the preceding information, if no goodwill or bonus is recorded, how much
should Daniel invest for a 20 percent interest 250,000

Carlos and Deo are partners who share profits and losses ratio of 7:3, respectively. On
October 5, 20CY, their respective capital accounts were as follows:
Carlos 35, 000
Deo 30, 000
 
On that date they agreed to admit Sotto as a partner with a one-third interests in the
capital and profits and losses, and upon his investment of 25,000. The new partnership
will begin with a total capital of 90,000. Immediately after Sotto’s admission, what are
the capital balances of Carlos, Deo and Sotto, respectively?  
31,500 28,500 30,000

When bonus is given to the old partners- all the choices are correct

Mitz, Marc, and Mart are partners sharing profits in the ratio of 5:3:2, respectively. As
of December 31, Year 1, their capital balances were 95,000 for Mitz, 80,000 for Marc,
and 60,000 for Mart. On January 1, Year 2, the partners admitted Vince as a new
partner and according to their agreement, Vince will contribute P80,000 in cash to the
partnership  and also pay 10,000 for 15% of Marc’s share. Vince will be given a 20%
share in profits, while the original partners’ share will be proportionately the same as
before. After the admission of Vince, the total capital will be 330,000 and Vince’s
capital will be 70,000.
 
The total amount of goodwill to the old partners, upon the admission of Vince would be: 15,000
 Roy admits Al as a partner in the business.  Balance sheet accounts of Roy on
September 30, just before admission of Al show:
 
Cash 15, 600
Accounts Receivable 72, 000
Merchandise
Inventory 108, 000
Accounts Payable 37, 200
Roy, Capital 158, 400
 
It is agreed that for purposes of establishing Roy’s interest, the following adjustments
shall be made:
·         An allowance for doubtful accounts of 2% is to be established
·         Merchandise inventory is to be valued at 121,200
·         Prepaid expenses of 2,100 and accrued expenses of 2,400 are to be
recognized.
 
Al is to invest sufficient cash to obtain a 1/3 interest in the partnership.   How much is
Al’s investment to the partnership? 84,930

Dunn and Grey are partners with capital account balances of 60,000 and 90,000,
respectively. They agree to admit Zorn as a partner with one-third interest in capital and
profits, for an investment of 100,000, after revaluing the assets of Dunn and Grey. Under
the Goodwill method, goodwill to the original partners should be 50,000

Admission of a new partner by investment will increase both the asset and
capitalization of the partnership

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. David invests 50,000 for a one-fifth interest. What
amount of goodwill will be recorded? 20,000

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. David directly purchases a one-fifth interest by paying
Allen 34,000 and Daniel 10,000. The land account is increased before David is admitted. By
what amount is the land account increased? 40,000
 The partnership of Cat and Dog provides for 3:2 sharing in profits and losses. Prior to
the admission of a third partners Elf, the capital accounts are Cat, 120,000 and Dog,
80,000. Elf, 50,000 for a 75,000 interests and partners agreed that the net assets of the
new partnership would be 300,000.
 
How much is Dog’s capital in the new partnership? 90,000

Which of the following best characterizes the bonus method of recording a new partner’s
investment in a partnership? Assuming that recorded assets are properly valued, the
book value of the new partnership is equal to the book of the previous partnership and
the investment of the new partner .

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. Allen and Daniel agree that some of the inventory is
obsolete. The inventory account is decreased before David is admitted. David invests 40,000 for
a one-fifth interest. What is the amount of inventory written down? 20,000

Blau and Rubi are partners who share profits and losses in the ratio of 6:4,
respectively. On May 1, 2017, their respective capital accounts were as follows:
Blau        60,000
Rubi        50,000
On that date, Lind was admitted as a partner with a one-third interest in capital and profits for an
investment of 40,000. The new partnership began with total capital of 150,000.

Immediately after Lind’s admission, Blau’s capital should be 54,000

A condensed statement of financial position for Alba, Barba and Clara appears below.
For Alba, Barba and Clara share profits and losses in ratio of 2:3:5, respectively.
 
Assets
Cash 100,000
Inventory 125,000
Marketable Securities 200,000
Land 100,000
Building- net 500,000
Equities
Alba, capital 425,000
 Barba, capital 400,000
Clara, capital 200,000

 
The partners agreed to admit Darna. The fair market value of the land is appraised at
200,000 and the market value of the marketable securities is 250,000. The assets are
to be revalued prior to the admission of Darna and there is 30,000 goodwill that
attaches to the old partnerships
 
How much cash will Darna have to invest to acquire a (1) one-fifth interest or a (2) four-fifth
interest? 1) 301,250; 2) 4,820,000

In the partnership of ABC, B sold his partnership interest share to D. who will receive the
cash payment made by D? Partner B

The following is the condensed statement of financial position of the partnership Jo,

Li and Bi who share profits and losses in the ratio of 4:3:.3
Cash 180, 000
Other assets 1, 660, 000
Jo, receivables 40, 000
Total 1, 880, 000

Accounts payable 420, 000

Bi, Loan 60, 000
Jo, capital 620, 000
Li, capital 400, 000
Bi, capital 380, 000
Total 1, 880, 000

 
Assume that the assets and liabilities are fairly valued on the balance sheet and the partnership
decides to admit Mac as a new partner, with a 20% interests. No goodwill or bonus is to be
recorded. How much Mac should contribute in cash or other assets? 350,000

Partners Chito and Ditas share profits in the ratio of 6:4 respectively. On December 31,
20CY their respective capital balances were Chito, 120,000 and Ditas, 100,000. On that
date Meng was admitted as partner of 80,000. The partnership began in 20CY with total
capital of 300,000. Immediately after Meng’s admission, Chito’s capital should
be:108,000

Rio, Sol and Tom have a partnership. Their capital balances are 96,000, 72,000, and
54,000, respectively. They split profits equally. They are considering on what basis to
admit Vic, a prospective new partner. Based on appraisal analysis, the net assets of
the partnership are worth 240,000. Vic is willing to put up cash of 24,000, plus a
computer with a fair value of 42,000.
 
Calculate the capital balances if the existing partners recognize the difference between the fair
value and books value of the partnership’s net assets as goodwill.

Rio 102,000  Sol 78,000 Tom, 60,000 Vic, 66,000

Ace, Boy and Cid are partners sharing profits in the ratio of 3:3:2. On July 31, their
capital balances are as follows:
Ace 700, 000
Boy 500, 000
Cid 400, 000

 
The partners agree to admit Doe on the following agreement:
1.       Deo is to pay Ace 500,000 for ½ interests of Ace’s interests.
2.       Deo is also to invest 400,000 in the partnership
3.       The total capital of the partnership is to be 2,400,000 of which Deo’s interests is to
be 25%
 
What are the capital balances of the partners after the admission of Deo?
556, 250 706, 250 537, 500

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.

Refer to the information provided above. Allen and Daniel agree that some of the
inventory is obsolete. The inventory account is decreased before David is admitted.
David invests 40,000 for a one-fifth interest. What are the capital balances of Allen and
Daniel after David is admitted into the partnership? 125,000 35,000
 On June 30, 20CY, the condensed balance sheet for the partnership of Eddy, Fox, and
Grimm together with their respective profit and loss sharing percentage, was as
follows:
 
Assets, net of liabilities 320,000

Eddy, capital (50%) 160,000

Fox, capital (30%) 96,000
Grimm, capital (20%) 64,000
320,000

Assume that Hamm is admitted as a new partner with a 25% interest in the capital of the
new partnership for a cash payment of 140,000, total goodwill implicit in the transaction
is to be recorded.
Immediately after admission of Hamm, Eddy’s capital account balance should be
210,000

Partners Alba, Basco and Castro share profits and losses 50:30:20, respectively. The
statement of financial position at April 30, 2013 follows:
 
Cash 40, 000
Other assets 360, 000
Total 400, 000

Accounts payable 100, 000

Alba, Capital 74, 000
Basco, Capital 130, 000
Castro, Capital 96, 000
Total 400, 000

 
The assets and liabilities are recorded and presented at their respective fair values, Jocson is to
be admitted as a new partner with a 20% capital interests and a 20% share of profits and losses in
exchange for a cash contribution. No goodwill or bonus is to be recorded. How much cash should
Jocson contribute? 75,000
Fernando and Jose are partners with capital balances of 30,000 and 70,000, respectively.
Fernando has a 30% interest in profits and losses. All assets of the partnership are at fair market
value except equipment with book value of 300,000 and fair market value of 320,000. At this
time, the partnership has decided to admit Rosa and Linda as new partners. Rosa contributes cash
of 55,000 for a 20% interest in capital and a 30% interest in profits and losses. Linda contributes
cash of 10,000 and an equipment with a fair market value of 50,000 for a 25% interest in capital
and a 35% interest in profits and losses. Linda is also bringing special expertise and clients
contact into the new partnership.
Using the bonus method, what is the amount of bonus? 18,250

Mitz, Marc, and Mart are partners sharing profits in the ratio of 5:3:2, respectively. As
of December 31, Year 1, their capital balances were 95,000 for Mitz, 80,000 for Marc,
and 60,000 for Mart. On January 1, Year 2, the partners admitted Vince as a new
partner and according to their agreement, Vince will contribute P80,000 in cash to the
partnership  and also pay 10,000 for 15% of Marc’s share. Vince will be given a 20%
share in profits, while the original partners’ share will be proportionately the same as
before. After the admission of Vince, the total capital will be 330,000 and Vince’s
capital will be 70,000.

The balance of Marc’s capital, after the admission of Vince would be: 79,100

The capital account for the partnership of Lucas and Mateo at October 31, 20CY are
as follows:
Lucas, capital 80, 000
Mateo, capital 40, 000

 
The partners share profits and losses in the ratio of 6:4 respectively.
 
The partnership is in desperate need of cash, and the partners agree to admit Naron as a partner
with one-third in the capital and profits and losses upon his investment of 30,000. Immediately
after Naron’s admission, what should be the capital balance of Lucas, Mateo and Naron
respectively. Assuming goodwill is not to be recognized? 68,000 32,000 50,000

In the AD partnership, Allen's capital is 140,000 and Daniel's is 40,000 and they share income in
a 3:1 ratio, respectively. They decide to admit David to the partnership.
Refer to the information provided above. What amount will David have to invest to give him
one-fifth percent interest in the capital of the partnership if no goodwill or bonus is
recorded? 45,000

The condensed balance sheet of Adams & Gray, a partnership, at December 31, 2017,
follows:
  
Current assets P  250,000
Equipment (net) 30,000
Total assets P  280,000

Liabilities P    20,000

Adams, capital 160,000
Gray, capital 100,000
Total liabilities and capital P  280,000

 
On December 31, 2017, the fair values of the assets and liabilities were appraised at P240,000
and P20,000, respectively, by an independent appraiser. On January 2, 2018, the partnership was
incorporated and 1,000 shares of P5 par value common stock were issued. Immediately after the
incorporation, what amount should the new corporation report as additional paid in capital ?
215,000

Jay & Kay partnership’s balance sheet at December 31, 2018, reported the following:
Total assets 100,000
Total liabilities 20,000
Jay, capital 40,000
Kay, capital 40,000
On January 2, 2019, Jay and Kay dissolved their partnership and transferred all assets and
liabilities to a newly formed corporation. At the date of incorporation, the fair value of the net
assets was 12,000 more than the carrying amount on the partnership’s books, of which 7,000 was
assigned to tangible assets and 5,000 was assigned to goodwill. Jay and Kay were each issued
5,000 shares of the corporation’s 1 par value common stock. Immediately following
incorporation, additional paid-in capital in excess of par should be credited for 82,000

The condensed balance sheet of A and B Partnership, together with their P/L ratio at
Dec. 31, Year 2, follows:
Current assets 250,000   Liabilities 20,000
Equipment, net 30,000   A, Capital 160,000
(60%)
      B, Capital 100,000
(40%)
Total 280,000   Total 280,000
  
On December 31, Year 2, the fair values of the assets and liabilities were appraised at 240,000
and 20,000, respectively, by an independent appraiser. On January 2, Year 2, the partnership was
incorporated and 12,000 shares of P5 par value common stock were issued to A and B.
Immediately after the incorporation, how many shares will be issued to A? 7,418 shares

When the partnership’s non-cash assets are realized at  less than its book value during
the liquidation process, it results to a- loss on realization

The process of winding-up the business activity that includes converting non-cash
assets into cash, paying its liabilities and distribution of cash and the remaining assets
to individual partners- liquidation

The following are the causes of partnership’s dissolution with liquidation, except- when
partners dies

When a partner develops a debit balance in his capital, but such partner has a loan to the
partnership, he may exercise the doctrine of- right of offset

D, E and F are partners sharing profits in the ratio of 40:35:25, respectively.   On

December 31, 2016, they agree to liquidate.   A balance sheet prepared on this date
follows:
 
DEF Partnership
Balance Sheet
As of December 31, 2016
 
Cash P  2,000 Liabilities P  6,000
Other Assets   46,000 E, Loan 5,000
    F, Loan 2,500
    D, Capital 14,450
    E, Capital 12,550
    F, Capital 7,500
 Total P48,000   P48,000

 
The results of liquidation are summarized below:
  Book Cash Exp. of Cash Liabili
Realizatio Value Realiz Realizati witheld  ty paid
ns ed on for estd.
exps.
January P12,0 P10,50 P500 P2,000 P4,000
00 0
February 7,000 6,000 750 1,250 2,000
March 15,000 10,000 600 500 ---
April 12,000 4,000 400 --- ---
 
If cash id distributed at the end of each month of liquidation, how much is the total asset to be
distributed to partners at the end of March? 10,150

When a partnership is liquidated, it is usually focused on the following activities?

Terminal activities

The first priority to be paid when there is cash available in the liquidation process, be it in
lump sum or installment type- outside creditors

HM, CM and DM of The M3 Partnership has the following account balances before
liquidation:
 
Cash P420,000 Liabilities P524,000
Noncash assets 3,880,000 Loan from DM 100,000
Loan to CM 192,000 HM, Capital 1,120,000
(25%)
Receivable from 44,000 CM, Capital 1,624,000
HM (15%)
Expenses 2,556,000 DM, Capital 2,256,000
    Revenues 1,468,000
 
If the partners undertake an instalment liquidation, how much cash may be distributed
immediately to the partners? 0