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PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:O acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? a. P 62, 200. 15 b. P 52,200.15 c. P 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5

PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:O acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? a. P 62, 200. 15 b. P 52,200.15 c. P 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5

Principles of Accounting Volume 1
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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PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:0 acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? а. Р 191,600.70 b. Р 192,600.7о с. Р 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? а. Р62, 200. 15 b. Р52,200.15 с. Р 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5
Transcribed Image Text:PARTNERSHIP DISSOLUTION M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:0 acquires half of N's interest for P 120,000. Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? а. Р 191,600.70 b. Р 192,600.7о с. Р 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? а. Р62, 200. 15 b. Р52,200.15 с. Р 52,201.15 d. P 62, 201.15 18. What is the profit or loss sharing ratio of the partners after O's admission? a. 50-50-50 b. 75-20-5
c. 70-15-15 d. 65-20-15 19. Under Case # 2, Scenario A: how much is the balance of M's capital account after O's admission? а. Р 193,601.8 b. P 192,600.7 P 193,600.8 P 191,600.7 C. d. 20. Under Case # 2, Scenario B: how much is the balance of N's capital account after O's admission? а. Р98,776.3 b. P 98,777.3 c. P 99,777.3 d. P 98,775.3
Transcribed Image Text:c. 70-15-15 d. 65-20-15 19. Under Case # 2, Scenario A: how much is the balance of M's capital account after O's admission? а. Р 193,601.8 b. P 192,600.7 P 193,600.8 P 191,600.7 C. d. 20. Under Case # 2, Scenario B: how much is the balance of N's capital account after O's admission? а. Р98,776.3 b. P 98,777.3 c. P 99,777.3 d. P 98,775.3
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