Chapter 4 (Sol Man) - Partnership Dissolution PDF

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Ben Bob TotalDrawings (60,000) (120,000) ( 180,000) - CHAPTER Ex. Capital balances 12/31 240,000 P260,000 P500, Share in net income P125,000 P125,000 P250, Updated capital accounts 7/1/16 P290,000 P250,000 P540, Revalue equipment (15,000) (15,000) (30,000) Income S 250, a) Ben, Drawing 125, Bob, Dra...

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CHAPTER 4 Ex. 1 Ben 240,000 P125,000 (60,000) (15,000) P290,000

Capital balances 12/31 Share in net income Drawings Revalue equipment Updated capital accounts 7/1/16 a) Income S Ben, Drawing Bob, Drawing

Bob P260,000 P125,000 (120,000) (15,000) P250,000

Total P500,000 P250,000 ( 180,000) (30,000) P540,000

250,000 125,000 125,000

Ben, Drawing (125-60) Bob, Drawing (125-120) Ben, Capital Bob, Capital

65,000 5,000 65,000 5,000

Ben, Capital 15,000 Bob, Capital 15,000 Accum Depn 30,000 Fair value P150,000 against book value P180,000 b) Ben, Capital 290 x .5) Ted,Capital

145,000 145,000 0

c) and d) Ben Bob Ted Partners’ Equity

P&L Ratio 25% 50% 25% 100%

Capital P 145,000 250,000 145,000 P 540,000

EX 2 a) P150,000 Lena, Capital Rod, Capital

100,000 100,000

b) ) P240,000 payment against P250,000 actual interest of the three partners = loss of P10,000 . Tina, Capital Lou, Capital Lena, Capital Rod, Capital c).Tina, Capital Lou, Capital Lena, Capital Assets Tina, Capital Rod Capital . Ex. 3 a) Daisy, Capital Maggie, Capital

100,000 100,000 50,000 250,000 100,000 100,000 50,000 250,000 100,000

b) Partners’ Equity: Tina, Capital P200,000 Lou, Capital 300,000 Lena, Capital 150,000 Rod, Capital 100,000 Total P750,000

100,000 160,000 160,000

a.b) Bonnie, Capital Maggie, Capital

200,000

c. Land Bonnie, Capital Daisy Capital

160,000

200,000

80,000 80,000

Revaluation Daisy’s Interest Payment (200,000 x 2) Excess (share of Daisy in the asset rev) Total Asset Rev Daisy, Capital Maggie, Capital

P 320,000 400,000 P 80,000 P 160,000 200,000 200,000

d. Bonnie, Capital Daisy, Capital Plant assets

PE P 480,000 200,000 200,000 P 880,000

60,000 60,000 120,000

Revaluation Total Partnership Equity Payment (300,000 x 2) Decrease Plant Assets Bonnie, Capital Daisy, Capital

P 720,000 600,000 P 120,000

Revised Bonnie Daisy Maggie

170,000 130,000

Maggie, Capital EXERCISE 4 . Partners Edgar Paz Emy

Revised Bonnie Daisy Maggie

300,000

Capital Balances P 400,000 500,000 300,000 P1,200,000

30% 40% 30%

Adjusted Balances P360,000 480,000 360,000 P1,200,000

Difference P (40,000) (20,000) 60,000

Paz, Capital 20,000 Edgar, Capital 40,000 Emy, Capital 60,000 Emy must pay Edgar and Paz if she wants her capital to be higher than before. Exercise 5 1,200,000 of the partnership x .15= 180,000 x 4/9 and 5/9= 80,000 and 100,000 Edgar, Capital Paz, Capital Georgina, Capital

80,000 100,000 180,000

Revise ratio of Edgar 3/7 x15% =6.43% 30% -6.43%=23.57%

PE P 170,000 130,000 300,000 P 600,000

Emy

4/7 x15% =8.57% 40%- 8.57%=31.43%

Georgina Paz Exercise 6 Orig Pen May Wen

15.0% 30.0%

Asset Rev

a)

Adjusted Captl Bal

450,000 650,000

16,000 24,000

466,000 674,000 x.4

1,100,00 0

40,000

1,140,000

Inventory Pen, Capital May, Capital Accounts Receivable

Transfer (269,600) 269,600

d)Revised PE 466,000 404,400 269,600 1,140,000

Revised P and L 40.00% 20.00% 40.00%

e) Profit Share P 89,600 44,800 89,600 P224,000

58,000 24,000 16,000 18,000

b) Wen must pay 674,000 x .4= 269,600 + 15,000 gain= P284,600 c) May Capital Wen, Capital

269,600 269,600

Exercise 7 1,140,000/60%= total agreed equity P1,900,000 x 40%= P760,000 Pen May Wen

466,000 674,000 760,000 1,900,000

Cash 760,000 Wen, Capital 760,000

Exercise 8 First Option: Total Cont Agreed Equity Pen 466,000 May 674,000 Wen 500,000 (25%)410,000 1,640,000 1,640,000 Option 2: Total Cont. Pen 466,000 May 674,000 Wen 300,000 1,440,000

Agreed Equity (25%)300,000 1200,000

Bonus 36,000 54,000 (90,000)

Downward Adj. ( 96,000) (144,000)

Entry Cash 50,000 Pen, Captl 36,000 May, Captl 54,000 Wen, Captl 410,000 Bonus Pen, Captl May, Captl Assets

96,000 144,000 240,000

(240,000) Cash 300,000 Wen,Captl 300,000

Option 2 may be frowned upon, cash investment is lower by P10,000, and bonus to be sacrificed is higher that Option 1 and the new partner gets the same 30% interest over assets and profits. Exercise 9 Option a: Agreed equity 120,000/30%= 400,000 – 320,000 total contributions= asset rev of P80,000 Assets Athena, Capital Apollo, Capital Cash Titus, Capital

80,000 48,000 32,000 120,000 120,000

Option b: Agreed equity 75,000/30%= 250,000 – 270,000 total contributions= asset impair of P20,000 Athena, Capital Apollo, Capital Assets

12,000 8,000

Cash Titus, Capital

70,000

20,000 70,000

EXERCISE 10 a. Fiona Gary Romy

b.

Capital Balances P 350,000 250,000 300,000 P 900,000

Investment

Fiona Gary Romy

c. Fiona Gary Romy

P 350,000 250,000 300,000 P900,000

Bonus

60,000 -

Asset Investment Rev P 350,000 (87,500) 250,000 (62,500) 300,000 P 900,000 150,000

d.

Agreed Balances P300,000 200,000 300,000 P900,000

300,000 300,000

Agreed PE -

Agreed Partners E

300,000 P 750,000 AgreedPE

Fiona Gary Romy

Bonus 17,500 12,500 (30,000)

e.

Investment

Asset Rev

Agreed PE___

Fiona Gary Romy

P350,000 250.000 300,000 900,000

58,333 41,667

270,000 P900,000

300,000 35,000 25,000

Cash Fiona, Capital Gary, Capital Romy, Capital 60% of P1M

360,000 P900,000

Investment P350,000 250.000 300,000 P900,000

100,000

Cash Romy, Capital

360,000

Fiona,Capital Gary, Capital Assets 40%

87,500 62,500 150,000

Cash

300,000

Romy, Captl

30%

300,000

Cash Fiona,Capital Gary, Capital Romy, Capital

300,000

Assets

100,000

17,500 12,500 270,000

Fiona, Capital Gary, Capital 300,000 1,000,000

58,333 41,667

30% Cash Romy, Capital

300,000 300,000...