Baysa and Lupisan - Partnership and Corporation Accounting PDF

Preview

Summary

Partnership DissolutionNew 88,750 115,000 (26,250)AC CC BonusP725,000 P725,000 -----4. Cash 120,Carmen, Capital (P60,000 x 75%) 45,Centeno, Capital (P60,000 x 25%) 15,Corrales, Capital 180,AC CC BonusCorrales, Capital 120,Carmen, Capital 30,Centeno, Capital 10,6. Cash 160,Corrales, Capital 140,Carme...

Description

CHAPTER 4 Partnership Dissolution EXERCISES Exercise 4-1 1. Camus, Capital (90,000 x 1/3) Cuenco, Capital (60,000 x 1/3) Cerda, Capital 2.

3.

4.

5.

30,000 20,000 50,000

Other Assets Camus, Capital (P120,000 x 75%) Cuenco, Capital (P120,000 x 25%)

120,000 90,000 30,000

Camus, Capital [(P90,000 + P90,000) x 1/3] Cuenco, Capital [(P60,000 + P30,000) x 1/3] Cerda, Capital

60,000 30,000

Cash Cerda, Capital Camus, Capital (P30,000 x 75%) Cuenco, Capital (P30,000 x 25%)

90,000

Cash Other Assets Camus, Capital (P120,000 x 75%) Cuenco, Capital (P120,000 x 25%) Cerda, Capital AC Old P270,000 New 90,000 P360,000

90,000

60,000 22,500 7,500 90,000 120,000 90,000 30,000 90,000 CC P150,000 90,000 P240,000

Asset Rev P120,000 -----P120,000

Cash Camus, Capital (P30,000 x 75%) Cuenco, Capital (P30,000 x 25%) Cerda, Capital

90,000 22,500 7,500 120,000

Exercise 4-2 1. Cular, Capital Canda, Capital

20,000

2.

Other Assets Capco, Capital Cular, Capatil Cruz, Capital P70,000  ¼ = P280,000 – (P100,000 + P80,000 + P60,000) = P40,000

40,000

Capco, Capital (P100,000 + P25,000) x ¼ = P31,250 Cular, Capatil (P80,000 + P10,000) x ¼ = P22,500 Cruz, Capital (P60,000 + P5,000) x ¼ = P16,250 Canda, Capital

31,250 22,500 16,250

3.

Cash

20,000

25,000 10,000 5,000

70,000 115,000

Chapter 4 - Partnership Dissolution Suggested Answers

Canda, Capital Capco, Capital (P26,250 x 5/8 = P16,406.25) Cular, Capatil ( P26,250 x 2/8 = P6,562.50) Cruz, Capital (P26,250 x 1/8 = P3,281.25) AC CC Old P266,250 P240,000 New 88,750 115,000 P355,000 P355,000 Exercise 4-3 1. Catral, Capital Conti, Capital P480,000 x 1/3 = P160,000 2.

3.

88,750.00 16,406.25 6,562.50 3,281.25 Bonus P26,250 (26,250) P -----160,000 160,000

Clemente, Capital Conti, Capital P360,000 x 1/3 = P120,000

120,000

Other Assets Catral, Capital Clemente, Capital P252,000 1/4 = P1,008,000 – P840,000 = P168,000 P168,000 x 2/6 = P56,000; P168,000 x 4/6 = P112,000

168,000

Catral, Capital Clemente, Capital Conti, Capital (P480,000 + P56,000) x 1/4 = P134,000 (P360,000 + P112,000 ) x 1/4 = P118,000

134,000 118,000

120,000

56,000 112,000

252,000

Exercise 4-4 1a. Carlos, Capital (P200,000 x ¼) Cruz, Capital (P300,000 x 1/3) Caparas, Capital

50,000 100,000

1b.

120,000

150,000

Cash Carpio, Capital

2.

120,000

Carlos (P200,000 – 50,000 = P150,000) Cruz (P300,000 – 100,000 = P200,000) Caparas Carpio

150,000 200,000 150,000 120,000

Exercise 4-5 1. Bonus Method Cash Cuenca, Capital (P16,667 / 2) Claudio, Capital (P16,667 / 2) Cabral, Capital Old New 2.

Asset Revaluation Method Cash

AC P483,333 241,667 P725,000

225,000 8,333 8,334 241,667 CC P500,000 225,000 P725,000

Bonus (P16,667) 16,667 ----225,000

Chapter 4 - Partnership Dissolution Suggested Answers

Cuenca, Capital (P50,000 / 2) Claudio, Capital (P50,000 / 2) Other Assets Cabral, Capital Old New

25,000 25,000 50,000 225,000

AC P450,000 225,000 P675,000

CC P500,000 225,000 P725,000

Asset Rev. (P 50,000) -----(P50,000)

Exercise 4-6 1. Cash Choy, Capital (P21,000 x 2/5) Chua, Capital (P21,000 x 1/5) Cheng, Capital (P21,000 x 2/5) Chiu, Capital Old New

2.

AC P396,000 99,000 P495,000

120,000 8,400 4,200 8,400 99,000 CC P375,000 120,000 P495,000

Bonus P21,000 (21,000) -------

Other Assets Choy, Capital Chua, Capital Cheng, Capital

105,000

Cash Chiu, Capital

120,000

Old New

42,000 21,000 42,000

120,000 AC P480,000 120,000 P600,000

CC P375,000 120,000 P495,000

Asset Rev P105,000 P105,000

Problem 4-1 1. Carmen, Capital Centeno, Capital Corrales, Capital 2.

40,000 20,000 60,000

Other Assets Carmen, Capital Centeno, Capital P120,000  1/3 = P360,000 – P240,000 = P120,000

120,000 90,000 30,000

Carmen, Capital ([P160,000 + P90,000] x 1/3) Centeno, Capital [(P80,000 + P30,000) x 1/3] Corrales, Capital 3.

83,333 36,667 120,000

Other Assets Cash Carmen, Capital Centeno, Capital Corrales, Capital Old New

120,000 120,000 90,000 30,000 120,000 AC P360,000 120,000

CC P240,000 120,000

Asset Rev P 120,000 -----

Chapter 4 - Partnership Dissolution Suggested Answers

P480,000 4.

6.

7.

10.

180,000 CC P240,000 120,000 P360,000

Bonus P(60,000) 60,000 -------160,000

Cash Corrales, Capital Carmen, Capital Centeno, Capital

160,000

Cash Corrales, Capital Carmen, Capital Centeno, Capital

100,000

120,000 30,000 10,000

140,000 15,000 5,000

85,000 11,250 3,750 AC P255,000 85,000 P340,000

CC P240,000 100,000 P340,000

Bonus P15,000 (15,000) --------

Cash Other Assets Corrales, Capital Carmen, Capital Centeno, Capital Old New

9.

AC P180,000 180,000 P360,000

120,000 45,000 15,000

Cash Corrales, Capital Carmen, Capital Centeno, Capital

Old New

8.

P 120,000

Cash Carmen, Capital (P60,000 x 75%) Centeno, Capital (P60,000 x 25%) Corrales, Capital Old New

5.

P360,000

110,000 90,000 110,000 67,500 22,500 AC P330,000 110,000 P440,000

CC P240,000 110,000 P350,000

Asset Rev P90,000 -------P90,000

Cash Carmen, Capital (P16,000 x 75%) Centeno, Capital (P16,000 x 25%) Corrales, Capital

96,000 12,000 4,000

Cash Corrales, Capital P240,000  4/5 = P300,000 x 1/5 = P60,000

60,000

Problem 4-2 1. Cash Calma, Capital

112,000

60,000

150,000 150,000

Chapter 4 - Partnership Dissolution Suggested Answers

Old New

2.

AC P300,000 150,000 P450,000

CC P300,000 150,000 P450,000

Cash Calma, Capital Coral, Capital Corpuz, Capital Old (3/4) New (1/4)

3.

120,000 105,000 9,000 6,000 AC P315,000 105,000 P420,000

CC P300,000 120,000 P420,000

Bonus P15,000 (15,000) ------

Cash Coral, Capital Corpuz, Capital Calma, Capital Old New

4.

5.

6.

60,000 18,000 12,000 90,000 AC P270,000 90,000 P360,000

CC P300,000 60,000 P360,000

Bonus (P30,000) 30,000 -

Coral, Capital (P180,000 x ¼) Corpuz, Capital (P120,000 x ¼) Calma, Capital

45,000 30,000

Other Assets Coral, Capital Corpuz, Capital

30,000

Coral, Capital [(P180,000 + P18,000) ¼] Corpuz, Capital [(P120,000 + P12,000) ¼] Calma, Capital

49,500 33,000

Cash Other Assets Calma, Capital Coral, Capital Corpuz, Capital

90,000 60,000

Old New

75,000

18,000 12,000

82,500

90,000 36,000 24,000 AC P360,000 90,000 P450,000

CC P300,000 90,000 P390,000

Asset Rev. P 60,000 -----P 60,000

Problem 4-3 1. a. Cash Coloma, Capital b.

Cash Castillo, Capital (P25,000 x 8/10) Cordova, Capital (P25,000 x 2/10) Coloma, Capital AC

350,000 350,000 500,000 20,000 5,000 475,000 CC

Bonus

Chapter 4 - Partnership Dissolution Suggested Answers

Old New

c.

d.

e.

P1,425,000 475,000 P1,900,000

Cash Other Assets Castillo, Capital (P700,000 x 8/10) Cordova, Capital (P700,000 x 2/10) Coloma, Capital AC Old P2,100,000 New 700,000 P2,800,000

P1,400,000 500,000 P1,900,000

P25,000 ( 25,000) ----------700,000 700,000 560,000 140,000 700,000

CC P1,400,000 700,000 P2,100,000

Asset Rev P700,000 ----------P700,000

Castillo, Capital Cordova, Capital Coloma, Capital

140,000 210,000

Castillo, Capital Cordova, Capital Coloma, Capital

112,000 168,000

350,000

280,000

Problem 4-4 1. Total capital of old partners Fraction of interest of old partners Total partnership capital after admission of Cruz Interest of Cruz Required contribution of Cruz 2 a.

Bonus method AC P435,000 249,000 36,000 180,000 P900,000

Cortes Canda Cerra Cruz

2b.

P690,000  4/5 P862,500 x 1/5 P172,500

CC P420,000 240,000 30,000 210,000 P900,000

Bonus P15,000 9,000 6,000 ( 30,000) -------

Asset Revaluation method Cortes Canda Cerra Cruz

AC P495,000 285,000 60,000 210,000 P1,050,000

Problem 4-5 1. a. Asset Revaluation method Cash Clara, Capital Cora, Capital Celia, Capital

CC P420,000 240,000 30,000 210,000 P900,000

Asset Rev P75,000 45,000 30,000 P 150,000

90,000 22,500 18,000 4,500

Chapter 4 - Partnership Dissolution Suggested Answers

Other Assets Carla, Capital Old New

b.

45,000 90,000 AC P 630,000 90,000 P720,000

CC P 675,000 90,000 P765,000

Bonus method Cash Clara, Capital (P5,625 x 5/10) Cora, Capital (P5,625 x 4/10) Celia, Capital (P5,625 x 1/10) Carla, Capital AC Old P669,375 New 95,625 P765,000

Asset Rev (P45,000) (P45,000)

90,000 2,813 2,250 562 95,625 CC P675,000 90,000 P765,000

Capital balances – Bonus method Capital balances – Asset Revaluation method Reduction in depreciation due to asset revaluation Capital balances after reduction in depreciation Net advantage (disadvantage) of bonus over asset rev.

Bonus (P5,625) (5,625) ----Clara P321,187 P301,500 11,250 P 312,750 P 8,437

Cora P213,750 P198,000 11,250 P209,250 P4,500

Celia P134,438 P130,500 11,250 P141,750 (P 7,312)

Carla P95,625 P90,000 11,250 P101,250 (P5,625)

Celia will prefer the asset revaluation method over the bonus method because of the P7,312 advantage over the bonus method. 2.

a.

b.

Clara, Capital Cora, Capital Celia, Capital Carla, Capital

40,500 27,000 16,875

Other Assets Clara, Capital Cora, Capital Celia, Capital P90,000  1/8 = P720,000 – P675,000 = P45,000

45,000

Clara, Capital (P324,000 + P22,500) x 1/8 Cora, Capital (P216,000 + P18,000) x 1/8 Celia, Capital (P135,000 + P4,500) x 1/8 Carla, Capital

43,312 29,250 17,438

Problem 4-6 1. Capital balances before the admission of Camo Purchase of 1/6 interest of Cadiz Contribution to the partnership Asset revaluation to old partners Bonus to old partners

84,375

22,500 18,000 4,500

90,000

Cabal P150,000

6,000 6,000

Cadiz P180,000 (30,000)

Caldea P300,000

6,000 6,000

8,000 8,000

Camo 30,000 150,000 (20,000)

Total P630,000 ----150,000 20,000 ------

Chapter 4 - Partnership Dissolution Suggested Answers

Capital balances after the admission of Camo 2.

Cabal Cadiz

P162,000

= 30% x 75% = 22.5% = 30% x 75% = 22.5%

P162,000

P316,000

P160,000

P800,000

Caldea = 40% x 75% = 30% Camo = 25%

Problem 4-7 Capital balances Dec. 31, 2007 before closing Distribution of 2007 profit: Salaries Balance Share in 2007 profit Total Drawing Capital balances, January 1,2008 Investment of Calixto Bonus to Calixto Capital balances after the admission of Calixto Share in 2008 loss Drawing Capital balances, January 1, 2009 Loss on sale of the partnership business Cash Settlement to partners

Corona P250,000

Calderon P150,000

P45,000 (12,000) P33,000 P283,000 (41,000) P242,000

P45,000 (8,000) P37,000 P187,000 (34,000) P153,000

(39,000) P203,000 (26,250) (37,500) P139,250 (82,600) P56,650

(26,000) P127,000 (18,750) (25,000) P83,250 (59,000) P24,250

Calixto

P100,000 65,000 P165,000 (30,000) (34,000) P101,000 (94,400) P6,600

Total P400,000 P90,000 (20,000) P70,000 P470,000 (75,000) P395,000 100,000 P495,000 (75,000) (96,500) P323,500 (236,000) P87,500

MULTIPLE CHOICE 1. 2. 3. 4.

B C A A

5.

B Capital bal. before admission of Chat Asset Revaluation Balances Interest sold to Chat (25%) Balances after the admission of Chat

Chan P250,000 30,000 P280,000 ( 70,000) P210,000

Ching P150,000 18,000 P168,000 ( 42,000) P126,000

Chen P100,000 12,000 P112,000 ( 28,000) P 84,000

Total P500,000 60,000 P560,000 ( 140,000) P420,000

6.

A

P72,000 x ½

P 36,000

7.

C

Total partnership capital before the admission of Co Fraction of interest of old partners Total partnership capital after the admission of Co Fraction of interest of Co Required contribution of Co

P280,000  4/5 P350,000 x 1/5 P 70,000

8.

A Capital balances before adjustment Uncollectible accounts Worthless inventories Other assets written off

Cordova P641,976 ( 20,000) ( 5,500) ( 2,000)

Constancio P728,352 ( 35,000) ( 6,700) ( 3,600)

Chapter 4 - Partnership Dissolution Suggested Answers

Adjusted capital

P614,476

P683,052

9.

C

Total capital (P614,476 + P683,052) Total liabilities (P178,940 + P200,000 + P243,650 + P345,000) Total assets

P1,297,528 967,590 P2,265,118

10.

D

Total capital (P1,297,528 / 80%) Interest acquired by Cuyugan Cash to be contributed by Cuyugan

P1,621,910 x 20% P 324,382

11.

D

Cordova P614,476 648,764 P 34,288

Capital balances Required capital (P1,297,528 / 2) Cash paid (received) 12.

B Capital balances Cash paid (received) Net income Drawings Capital balances, end of first year

Cordova P614,476 34,288 130,000 ( 50,000) P728,764 2/6 1/6 1/6

13.

C

Conrado = ½ x 2/3 Cosio = 1/4 x 2/3 Cosme = 1/4 x 2/3

14.

C

Agreed capital Contributed capital (P500,000+P200,000) Asset Revaluation

15.

B

Conrado Capital bal. before the admission of Cueto Transfer of 1/3 interest Investment of Cueto Asset Revaluation Capital bal. after the admission of Cueto

P250,000

Constancio P683,052 648,764 (P 34,288)

Constancio P683,052 ( 34,288) 130,000 ( 65,000) P713,764

Cuyugan P324,382 65,000 ( 28,000) P361,382

P 750,000 700,000 P 50,000 Cosio P150,000 ( 50,000)

Cosme

Cueto

P100,000

25,000

12,500

12,500

P275,000

P112,500

P112,500

Total

P 50,000 200,000

P500,000 -----200,000 50,000

P250,000

P750,000

Chapter 4 - Partnership Dissolution Suggested Answers

Test Material No. 14 1. T 6. F 2. F 7. T 3. T 8. T 4. F 9. F 5. F 10. T

11. 12. 13. 14. 15.

F F F T T

1. 2. 3. 4. 5.

16. 17. 18. 19. 20.

T T F T T

6. 7. 8. 9. 10

TEST MATERIALS Test Material No. 15 Asset Revaluation Agreed capital Bonus Total contributed capital Dissolution Interest Dissolution Sale of interest to a partner Agreed capital Admission by purchase

11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Admission by investment Bonus to new partner Liquidation Capital credit When agreed capital is not given Old partners’ capital Fraction of interest Positive Asset Revaluation Personal gain or loss Net advantage

Test Material No. 16 1. B 2. C 3. A 4. B 5. B 6. D 7. A 8. C P160,000 + P380,000 = P540,000 x 1/4 = P135,000 9. B 10. C P120,000 + (P20,000* x 1/5) = P124,000 AC P420,000 140,000 P560,000 AC old partners P320,000 new partner 160,000 P480,000 (P100,000 + P200,000)  3/4 = P400,000 x 1/4 = P100,000 Cariaso Capital balances before admission of Cardel P400,000 Asset Revaluation 60,000 (P200,000  1/4) - P700,000 = P100,000 Capital balances after asset revaluation P460,000 Fraction of remaining interest ¾ Capital balances after admission of Cardel P345,000 *old partners new partner

11.

D

12. 13.

C B

14. 15. 16.

A B C

Bonus P20,000 (20,000) -----Bonus (P40,000) 40,000 -

Carino P200,000

Carillo P100,000

30,000 P230,000 ¾ P172,500

10,000 P110,000 ¾ P82,500

P400,000 x 3/4 = P300,000; P200,000 x 3/4 = P150,000; P100,000 x 3/4 = P75,000 AC P385,000 192,500 97,500 225,000 P900,000

Cariaso Carino Carillo Cardel

17.

CC P400,000 160,000 P560,000 CC P360,000 120,000 P480,000

B Capital bal. before the admission of Cordero

CC P400,000 200,000 100,000 200,000 P900,000

Coral

Camus

Cerda

P190,000

P160,000

P120,000

Bonus (P15,000) (7,500) (2,500) 25,000 -

Cordero

Total P470,000

Chapter 4 - Partnership Dissolution Suggested Answers

18. 19. 20.

B A A

Transfer of 15% int. Investment of Cordero Asset Revaluation Bonus to old partners Capital bal. after the admission of Cordero

( 24,000)

P 24,000 160,000

15,000 22,000

9,000 13,200

6,000 8,800

(44,000)

-----160,000 30,000 ------

P227,000

P158,200

P134,800

P140,000

P660,000

Coral 50% x 80% = Camua 30% x 80% = Cerda 20% x 80% = Cordero

40% 24% 16% 20%

Test Material No. 17 Problem A 1.

2.

3.

4.

5.

Asset revaluation to old partners - P100,000; no bonus AC Old P600,000 New 150,000 P750,000

CC P500,000 150,000 P650,000

Asset Rev P100,000 ------P100,000

No asset revaluation; bonus to old partners - P20,000 AC Old P520,000 New 130,000 P650,000

CC P500,000 150,000 P650,000

Bonus P 20,000 ( 20,000) -------

No asset revaluation;, bonus to new partner - P45,000 AC Old P455,000 New 195,000 P650,000

CC P 500,000 150,000 P650,000

Bonus (P45,000) 45,000 ------

Asset revaluation to old partners - P100,000; bonus to old partners - P37,500 AC CC Asset Rev Old P637,500 P500,000 P100,000 New 112,500 150,000 ------P750,000 P650,000 P100,000 No asset revaluation; bonus to old partners - P20,000. AC Old P520,000 New 130,000 P650,000 P750,000

CC P500,000 150,000 P650,000 P650,000

Problem B Total capi...