Module 4 5 Assessment PDF

Preview

Summary

AssessmentA. The ABC Partnership has the following information and A, a partner died:Exercise No. 1Capital interest of the disassociating partner: A B CProfit and loss sharing ratio is based on capital contributionActual capital or investment to the business before disassociation50,000 100,000 150,W...

Description

Assessment A. The ABC Partnership has the following information and A, a partner died: Exercise No. 1 Capital interest of the disassociating partner:

A

B

C

Profit and loss sharing ratio is based on capital contribution Actual capital or investment to the business before disassociation

50,000

100,000

150,000

Withdrawals or drawings

10,000

20,000

30,000

Share in the net income as of date of disassociation

5,000

10,000

15,000

Loans from the partnership

3,000

6,000

9,000

Sold to outsider

40,000

Sold to partners

45,000

Sold to partnership

35,000

1. Show the computation of the capital interest as of date of disassociation a. Compute for the capital interest of A b. Compute for the capital interest of B c. Compute for the capital interest of C

Capital Interest Add: Net Income as of date of disassociation Total available capital Less: Drawings Less: Loan from the partnership Capital Balance as of date of disassociation

A 50,000.00 5,000.00 51,000.00 10,000.00 3,000.00 42,000.00

B 100,000.00 10,000.00 102,000.00 20,000.00 6,000.00 84,000.00

C 150,000.00 15,000.00 153,000.00 30,000.00 9,000.00 126,000.00

2. Compute for the asset revaluation a. If A’s property administrator sells his share to an outsider ANSWER: No asset revaluation for sell of share to an outsider as such is a personal transaction. Journal entry is prepared instead.

A, Capital

42,000.00

Outsider, Capital

42,000.00

To record the sale of interest of A to an outsider b. If A’s property administrator sells his share to B and C, B paid for 4/5 of A’s capital interest and C, 1/5 ANSWER: No asset revaluation for sell of share to the remaining partners as such is a personal transaction. Journal entry is prepared instead. A, Capital 42,000.00 B, Capital C, Capital To record the sale of interest of A to the remaining partners

8,400.00 33,600.00

c. If A’s property administrator sells his share to ABC Partnership. A 50,000/300,000 Amount received by A from the partnership A's actual share in the partnership Gain/Loss of A, B and C

TOTAL ASSET REVALUATION

B C 100,000/300,000 150,000/300,000

35,00 0.00 42,00 0.00 (7,0 00.00)

(14, 000.00)

(21,00 0.00)

(42,000.00)

B. The ABC Partnership has the following information when B, a partner became incapacitated: Exercise No. 2 Capital interest of the disassociating partner:

A

B

C

Profit and loss sharing ratio is based on capital contribution Actual capital or investment to the business before disassociation

50,000

100,000

150,000

Withdrawals or drawings

10,000

20,000

30,000

1,000

2,000

3,000

Share in the net profit as of date of disassociation

Loans from the partnership

2,000

4,000

Sold to outsider

100,000

Sold to partners

100,000

Sold to partnership

100,000

6,000

3. Show the computation of capital interest as of date of disassociation a. Compute for the capital interest of A b. Compute for the capital interest of B c. Compute for the capital interest of C

Capital Interest Add: Loans to the Partnership Less: Net loss as of date of disassociation Total available capital Less: Drawings Capital Balance as of date of disassociation

A 50,000.0 0 2,000.0 0 (1,000. 00) 53,000.0 0 10,000.0 0 41,000.0 0

B 100,000.0 0 4,000.0 0 (2,000. 00) 106,000.0 0 20,000.0 0 82,000.0 0

C 150,000.0 0 6,000.0 0 (3,000. 00) 159,000.0 0 30,000.0 0 123,000.0 0

4. Compute for the asset revaluation a. If B’s agent sells his share to an outsider ANSWER: No asset revaluation for sell of share to an outsider as such is a personal transaction. Journal entry is prepared instead. B, Capital Outsider, Capital To record the sale of interest of B to an outsider

82,000.00 82,000.00

b. If B’s agent sells his share to B and C, B paid for the 30% and C the remaining 70%. ANSWER: No asset revaluation for sell of share to the remaining partners as such is a personal transaction. Journal entry is prepared instead.

B, Capital 82,000.00 A, Capital C, Capital To record the sale of interest of B to the remaining partners

24,600.00 57,400.00

c. If B’s agent sells his share to ABC Partnership A

B

50,000/300,000

100,000/300,000

C 150,000/300,00 0

9,0 00.00

100,0 00.00 82,0 00.00 18,0 00.00

27,000 .00

Amount received by B from the partnership B's actual share in the partnership Gain/Loss of A, B and C

TOTAL ASSET REVALUATION

54,000.00

C. The ABC Partnership has the following information when C, a partner became insolvent: Exercise No. 3 Capital interest of the disassociating partner:

A

B

C

Profit and loss sharing ratio is based on capital contribution Actual capital or investment to the business before disassociation

50,000

100,000

150,000

Withdrawals or drawings

10,000

20,000

30,000

5,000

10,000

15,000

Share in the net profit as of date of disassociation Loans to the partnership Loans from the partnership

4,000 3,000

9,000

Sold to outsider

200,000

Sold to partners

200,000

Sold to partnership

200,000

5. Show the computation of the capital interest as of date of association. a. Compute for the capital interest of A b. Compute for the capital interest of B c. Compute for the capital interest of C

Capital Interest

A 50,000.0 0

Add: Loans to the Partnership Add: Net Profit as of date of disassociation Total available capital Less: Drawings Less: Loan from the partnership Capital Balance as of date of disassociation

5,000.0 0 55,000.0 0 10,000.0 0 3,000.0 0 42,000.0 0

B 100,000.0 0 4,000.0 0 10,000.0 0 114,000.0 0 20,000.0 0

C 150,000.0 0

15,000.0 0 165,000.0 0 30,000.0 0 9,000.0 0 126,000.0 0

94,000.0 0

6. Compute for the asset revaluation a. If C sells his share to an outsider ANSWER: No asset revaluation for sell of share to an outsider as such is a personal transaction. Journal entry is prepared instead. C, Capital

126,000.00

Outsider, Capital

126,000.00

To record the sale of interest of C to an outsider

b. If C sells his share to B and C, B and C divide the share equally. ANSWER: No asset revaluation for sell of share to the remaining partners as such is a personal transaction. Journal entry is prepared instead. C, Capital 126,000.00 A, Capital B, Capital To record the sale of interest of C to the remaining partners

63,000.00 63,000.00

c. If C sells his share to ABC Partnership

A 50,000/300,000

B 100,000/300,000

C 150,000/300,000

Amount received by B from the partnership

200,000. 00

B's actual share in the partnership

126,000. 00

Gain/Loss of A, B and C

24,66 6.67

49,33 3.33

74,000. 00

TOTAL ASSET REVALUATION

148,000.00

7. Journalize all the entries to update the capital account of C. Income Summary 15,000.00 C, Capital To record C's share in net profits as of date of disassociation Due from C C, Capital To record of C's loan from the partnership C, Drawings C, Capital To record C's drawings

15,000.00

9,000.00 9,000.00

30,000.00 30,000.00

8. Journalize the selling of C’s capital interest to outsider. C, Capital

126,000.00

Outsider, Capital

126,000.00

To record the sale of interest of C to an outsider

9. Journalize the selling of C’s capital to A and B C, Capital A, Capital B, Capital

126,000.00 63,000.00 63,000.00

To record the sale of interest of C to the remaining partners

10. Journalize the selling C’s capital to the ABC Partnership Other Assets 148,000.00 C, Capital 126,000.00 A, Capital B, Capital Cash To record the sale of interest of C to the partnership

24,666.67 49,333.33 200,000.00...