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Sister Ericka, Brother Josef and Jhonel are partners sharing profits in the ratio of
4:4:2 respectively. As of December 31, 2013, their capital balances were 190,000
for Sister Ericka, 160,000 for Brother Josef, and 120,000 for Jhonel.
On January 1,2014, the partners admitted TT as a new partner and according to
their agreement, TT will contribute 160,000 in cash to the partnership and also pay
20,000 for 15% of Brother Josefs share. TT will be given a 20% share in profits while
the original partners share will be proportionately the same as before. After
admission of TT, the total capital will be 660,000 and TTs capital be 140,000.
a. The amount of asset revaluation upon the admission of TT is_______
b. The bonus to Jhonel upon admission of TT is _________
c. The capital of Brother Josef after admission of TT is __________
d. The partners profit and loss ratio after the admission of TT shall be ________
2. Don contributed 24,000 and Jommel contributed 48,000 to form a partnership,
and they agreed to share profits in the ratio of their original capital contributions.
During the first year of operations, they made a profit of 16,290; Don withdrew
5,050 and Jommel 8,000. At the start of the following year, they agreed to admit
Josef into the partnership. He was to receive a one-fourth interest in the capital and
profits upon payment of 30,000 to Don and Jommel, whose capital accounts were to
be reduced by transfers to Josefs capital account of amounts sufficient to bring
them back to their original capital ratio.
How should the 30,000 paid by Josef be divided between Don and Jommel?
3. The capital accounts of the partnership of NN, VV and JJ on June 1, 2011 are
presented below with their respective p and l ratios:
NN--------- 139,200 1/2
VV---------- 208,800 1/3
JJ----------- 96,000 1/6
On June 1 2011, LL is admitted to the partnership when LL purchased for 132,000, a
proportionate interest from NN and JJ in the net assets and profits of the
partnership. As a result of a transaction LL acquired a one-fifth interest in the net
assets and profits of the firm. What is the combined gain realized by NN and JJ upon
the sale of a portion of their interest in the partnership to LL?
4. On January 31,2011, partners of L, M and N had the following loan and capital
account balances (after closing entries for January) :
Loan receivable from L ------------ 20,000 dr
Loan payable to N--------- 60,000 cr
L, capital -------- 30,000 dr
M, capital -------- 120,000 cr
N, capital ------- 70,000 cr

The partnerships income sharing ratio was L(50%), M(20%), N(30%). On January
31,2011, Ole was admitted to the partnership for a 20% interest in total capital of
the partnership in exchange for an investment of 40,000 cash. Prior to Oles
admission, the existing partners agreed to increase the carrying amount of the
partnerships inventories to current fair value, 60,000 increase. The capital account
to be credited to Ole _______
5. The capital accounts for the partnership of L and M at October 31,2012 are as
LL,capital --------------80,000
MM,capital --------------40,000
The partners share p and l in the ratio of 3:2.
The partnership is in desperate need of cash and the partners agree to admit NN as
a partner with one-third in the capital and profits and losses upon his investment of
30,000. Immediately after NNs admission, what should be the capital balances of L,
M and N respectively, assuming bonus is to be recognized?
6. In the AD partnership, As capital is 140,00 and Ds is 40,000 and they share
income in a 3:1 ratio. They decide to admit C to partnership. Each of the following is
A and D agree that some of the inventory is obsolete. The inventory account is
decreased befor C is admitted. David invests 40,000 for a 1/5 interest . What is the
amount of inventory to be written down?
C directly purchases a 1/5 interest by paying A 34,000 and D 10,000. The land
account is increased before C is admitted. By what amount is the land account