Accounting for Partnership and Corporation SOLMAN (Baysa & Lupisan, 2014) Chapter 5 PDF

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CHAPTER 5 Change in Capital Structure Withdrawal, Retirement, Death or Incapacity of a Partner Exercise 1. Bonus method Dee, Capital Dantes, Capital x Dungca, Capital x Cash 1 Asset Revaluation method Other Assets Dee, Capital Cash Dantes, Capital x Dungca, Capital x 2. Asset Rev. Capital balances a...

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CHAPTER 5 Change in Capital Structure by Withdrawal, Retirement, Death or Incapacity of a Partner Exercise 5-1 1.a. Bonus method Dee, Capital Dantes, Capital (P10,000 x 3/5) Dungca, Capital (P10,000 x 2/5) Cash 1.b

20,000 6,000 4,000 30,000

Asset Revaluation method Other Assets (P10,000  1/6) Dee, Capital Cash Dantes, Capital (P60,000 x 3/6) Dungca, Capital (P60,000 x 2/6)

2.

60,000 20,000 30,000 30,000 20,000 Asset Rev.

Capital balances after retirement of Dee under the bonus method Balances after retirement of Dee under asset revaluation method Depreciation on asset rev. - equally Balances after depreciation

P60,000 (60,000) ------

Dantes

Dungca

P44,000

P26,000

P80,000 ( 30,000) P50,000

P50,000 ( 30,000) P20,000

Dantes will prefer the asset revaluation method. The gain is P6,000 under the asset revaluation method compared with the bonus method. Exercise 5-2 1. Diesta, Capital Dayrit, Capital (P16,000 x3/4) Dayap, Capital (P16,000 x 1/4) Cash 2.

Other Assets (P10,000  1/5) Diesta, Capital Dayrit, Capital (P50,000 x 3/5) Dayap, Capital (P50,000 x 1/5) Cash

Exercise 5-3 Diwa, capital, January 1 Drawing Share in net income (P20,000 x 30%) Interest of Diwa upon retirement

1.

Other Assets (P30,000 – P27,000 = P3,000 / 30%)

80,000 12,000 4,000 96,000 50,000 80,000 30,000 10,000 90,000

P25,000 ( 4,000) 6,000 P27,000

10,000

Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

2.

Diwa, Capital Cash Ditas, Capital (P10,000 x 30%) Dulce, Capital (P10,000 x 40%)

27,000

Ditas, Capital (P3,000 x 3/7) Dulce, Capital (P3,000 x 4/7) Diwa, Capital Cash

1,286 1,714 27,000

Exercise 5-4 1. Dolor, Capital Damian, Capital Damaso, Capital 2.

3.

3.

30,000

40,000 20,000 20,000 40,000

Other Assets (P46,000 – P40,000 = P6,000/ 1/3) Dolor, Capital Cash Damian, Capital Damaso, Capital

18,000 40,000

Dencio, Capital Doctor, Capital Dizon, Capital Domingo, Capital Cash Other Assets (P90,000 – P70,000 = P20,000 / 20%) Domingo, Capital Notes Payable Dencio, Capital Doctor, Capital Dizon, Capital

32,000 4,000 4,000

46,000 6,000 6,000

70,000 70,000 5,000 10,000 5,000 70,000 90,000 100,000 70,000 90,000 20,000 40,000 20,000

Exercise 5-6 1. Dimla, Capital Distor, Capital Daza, Capital Cash

720 480 12,000

2.

12,000

Daza, Capital Cash

37

30,000 3,000 4,000

Dolor, Capital Cash Damian, Capital Damaso, Capital

Exercise 5-5 1. Domingo, Capital Dizon, Capital 2.

page

13,200

10,800 37

Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

page

Dimla, Capital Distor, Capital

38

720 480

PROBLEMS Problem 5-1 1. Delfin, Capital Cash 2.

3.

4.

5.

200,000 200,000

Delfin, Capital Diokno, Capital (P120,000 x ½) Decena, Capital (P120,000 x ½) Cash

200,000 60,000 60,000

Other Assets (P120,000  1/3) Delfin, Capital Cash Diokno, Capital (P360,000 x 1/3) Decena, Capital (P360,000 x 1/3)

360,000 200,000

Delfin, Capital Cash Diokno, Capital (P20,000 x 1/2) Decena, Capital (P20,000 x 1/2)

200,000

Delfin, Capital Diokno, Capital (P75,000 x 1/3) Decena, Capital (P75,000 x 1/3) Cash Other Assets (P25,000  1/3)

200,000 25,000 25,000

320,000

320,000 120,000 120,000

180,000 10,000 10,000

175,000 75,000

Problem 5-2 1. Merchandise Inventory Capital Adjustment Account

3,500 3,500

Allowance for Doubtful Accounts Capital Adjustment Account

500 500

Capital Adjustment Account Danao, Capital Dalan, Capital Dahlia, Capital Danao, Capital Cash Notes Payable Problem 5-3 1

4,000 2,000 1,000 1,000

2.

27,000 2,000 25,000 Damo

Dayan

Datu

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Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

Capital, January 1, 2008 Net loss Drawing Capital upon retirement of Dayan 2.

3a.

b.

P120,000 ( 9,600) ( 24,000) P 86,400

page

P 70,000 ( 6,400) ( 24,000) P 39,600

Damo, Capital Datu, Capital Dayan, Capital Cash Inventory P39,600 – P30,000 = P9,600  20% =P48,000

14,400 24,000 39,600

Other Assets (P8,400 / 20%) Dayan, Capital Cash Damo, Capital (P42,000 x 30%) Datu, Capital (P42,000 x 50%)

42,000 39,600

Dayan, Capital Damo, Capital Datu, Capital Cash

39,600 3,150 5,250 48,000

2.

Dancel, Capital Daet, Capital

140,000

Dancel, Capital Cash Daet, Capital Dais, Capital

140,000

Other Assets Dancel, Capital Cash Daet, Capital Dais, Capital

68,000 140,000

Other Assets Dancel, Capital Cash

40,000 140,000

5.

80,000 16,000) 24,000) 40,000

48,000 12,600 21,000

12,000 8,000 140,000

4.

P ( ( P

30,000 48,000

Problem 5-4 1. Daet, Capital Dais, Capital Dancel, Capital Cash

3.

39

160,000

140,000

130,000 6,000 4,000

168,000 24,000 16,000

80,000

39

Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

page

Daet, Capital Dais, Capital 6.

7.

60,000 40,000

Dancel, Capital Dais, Capital

140,000

Dancel. Capital Delia, Capital

140,000

140,000

140,000

Problem 5-5 1. Books Other Assets Dizon, Capital Cash David, Capital Duque, Capital 2.

3a.

b.

40

36,000 24,000 240,000 264,000 18,000 18,000

Dizon, Capital Cash Notes payable David, Capital Duque, Capital

240,000

Dizon, Capital David, Capital Duque, Capital Cash Notes payable

240,000 24,000 24,000

Other Assets Dizon, Capital Cash Notes Payable David, Capital Duque, Capital

120,000 240,000

120,000 108,000 6,000 6,000

180,000 108,000

(P120,000 x 30%) (P120,000 x 30%)

180,000 108,000 36,000 36,000

Problem 5-6 Danao, Diaz, Dolor and Dungca Partnership Statement of Partners' Equity For the Year Ended December 31, 2009 40

Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

page

Danao Diaz Dolor Capital, January 1 P 84,000.00 P 75,000.00 P 48,000.00 Distribution of net income: Jan. 1 - Sept. 30 13,500.00 10,125.00 5,062.50 Oct. 1 - Dec. 31 4,705.15 3,528.86 1,764.43 Transfer of Dungca capital to his estate Retirement of Dolor 7,832.42 5,874.31 ( 54,826.93) Capital, December 31 P110,037.57 P 94,528.17 --------* P45,000 – P33,750 – (P50,062.50 x 10% x 3/12)) = P9,998.44

41

Dungca P45,000.00

Total P252,000.00

5,062.50 (50,062,50)

33,750.00 9,998.44* ( 50,062.50)

---------

( 41,120.20) P204,565.74

Income Summary Danao, Capital Diaz, Capital Dolor, Capital Dungca, Capital

33,750.00

Dungca, Capital Payable to the Estate of Dungca

50,062.50

Income Summary Payable to the Estate of Dungca

1,251.56

Income Summary Danao, Capital Diaz, Capital Diaz Costa, Capital

9,998.44

13,500.00 10,125.00 5,062.50 5,062.50

50,062.50

1,251.56

4,705.15 3,528.86 1,764.43

Dolor, Capital Notes Payable Danao, Capital Diaz, Capital

54,826.93 41,120.20 7,832.42 5,874.31 MULTIPLE CHOICE

1. 2. 3. 4. 5.

C A B C A

6.

A

7.

D

Amount paid by the partnership Capital of Dayrit Total capital before withdrawal of Dayrit P210,000 Total capital after withdrawal of Dayrit 160,000 Asset Revaluation to Dayrit Profit share of Dayrit Total asset revaluation Capital of Dino before purchasing interest from Dolor

P 74,000

50,000 P 24,000  30% P 80,000 P 35,000

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Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

8.

C

page

42

Interest of Dolor transferred to Dino Capital of Dino

20,000 P 55,000

Doctor's capital before the withdrawal of Dolor Share in the bonus given to Dolor (P32,000 - P20,000) x 3/6 Doctor's capital after the withdrawal of Dolor

P 45,000 6,000 P 39,000

9.

A

The same as the capital before the withdrawal of Dolor, P35,000

10.

B

Dino’s capital before the withdrawal of Dolor Share of Dino in the revaluation of assets Excess payment to Dolor Profit share of Dolor Increase in asset per revaluation Share of Dino in the asset revaluation Dino’s capital after the withdrawal of Dolor

11.

C

12.

B Loan and capital balances Revaluation of assets Bonus to Dizon

13. 14. 15.

P 35,000 P12,000  40% P30,000 x 30%

Dizon P206,000 24,000 12,000 P242,000

9,000 P 44,000

Dionisio P154,000 24,000 ( 4,000) P174,000

Divino P360,000 48,000 ( 8,000) P400,000

C C A TEST MATERIALS

Test Material No. 18 1. F 5. 2. T 6. 3. T 7. 4. F 8.

F T F T

9. 10. 11. 12.

T F T F

13. 14. 15. 16.

T T F T

17. 18. 19. 20.

T T F F

Test Material No. 19 1. B 2. C 3. A 4. A 5. C 6. B P160,000 - (P40,000 x 1/2) = P140,000 7. C P40,000  40% = P100,000 x 30% = P30,000 + P160,000 = P190,000 8. A 9. D P80,000 + P160,000 - P40,000 = P200,000 10. B P40,000 x 3/5 = P24,000; P40,000 x 2/5 = P16,000

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Chapter 5 - Withdrawal, Retirement, Death or Incapacity of a Partner

Test Material No. 20 1. Diones, Capital Donato, Capital Dulay, Capital 2.

3.

4.

5.

page

43

56,000 42,000 14,000

Diones, Capital Dumlao, Capital

56,000

Diones, Capital Inventories Equipment Allowance for Uncollectible Accounts Cash Donato, Capital Dulay, Capital

56,000 12,000 16,000

Diones, Capital Donato, Capital Dulay, Capital Cash

56,000 2,500 1,500

Diones, Capital Donato, Capital Dulay, Capital Cash Equipment

56,000 17,500 10,500

56,000

8,000 60,000 10,000 6,000

60,000

40,000 44,000

43...