QUIZ #3

Partnership Dissolution

Name: __________________________________ Date: _____________________ Score: ________

I. PROBLEM SOLVING. Solve the following independent problems. Show solutions in good form and
write your final answer in the space provided. (No solution, no point)

1. The capital balances in the FSH are F’s capital- 600,000, S’ capital – 500,000 and H’s capital –
400,000 and the income ratios are 5:3:2, respectively. The FISH partnership is formed after
admitting I to the firm with a cash investment of 600,000 for a 25% capital interest. The bonus
to be debited to H’s capital in admitting I is? ____________________

2. G purchases 50% of J’s capital interest in the JS partnership for 220,000. If the capital
balances of J and S are 300,000 and 400,000 respectively, G’s capital balances following the
purchase is? _____________________

3-5
The existing balances of old partners prior to the admission of D are as follows:
Partners
A - 100,000
B - 200,000
C - 300,000
D is to admitted to the partnership by direct purchase of 20% each of the existing partner’s
capital for 100,000.

3. The net asset of the partnership, right after the admission of D would be? ______________
4. The capital balance of A after admission of D is? ____________________
5. Assuming that D was admitted by investing 150,000 for 20% interest in the firm, D’s agreed
capital would be? _____________________

6. Jaja, Diana, and Revi are partners of JDR Partnership who share profit and losses in a ratio of
1:2:3, respectively and have the following capital balances on July 1, 2014. Jaja Capital –
500,000, Diana Capital – 350,125, Revi Capital – 250,650. On July 1, 2014, Peter admitted to
the partnership by buying ¼ of Jaja’s interest for 150,000. How much will be the total capital of
the partnership immediately after the admission of Peter? _____________

7. Partners Micheal, Ge, and Feb have total combines capital of 985,020. Harold is to be
admitted as a new partner with 25% interest in capital and earnings for a cash investment.
Bonus is not to be recorded. How much cash should Harold invest? ___________

8. Mela, Sheena and Patricia have equities in a partnership of 325,000, 225,000 and 100,550
respectively, and share profit and losses in a ratio of 2:1:2 respectively. Dianne is to be
admitted to the partnership by investing 200,000 for 20% interest and bonus method is used in
her admission. How much will be the capital balance of Dianne after admission?
________________