PROBLEM 3-4: EXERCISES - COMPUTATIONAL

Apple, Capital 12000

Banana, Capital 8000
Accounts Receivable 20,000
To record therevaluation of the A/R
#
Apple, Capital 24000
Banana, Capital 16000
Inventroy 40000
To record the revalutation of the Inventory
#
Apple, Capital 30000
Banana, Capital 20000
Equipment 50000
To record the revalutation of the Equipment
#
Apple, Capital 12000
Banana, Capital 8000
Accounts Payable 20000
To record the unrecorded Accounts Payable

CAPITAL BALANCES AFTER ADJUSTMENTS - BEFORE THE ADMISSION OF CARROT

Apple Banana Totals

Capital Unadjusted 515000 275000 790000
Share in the revaluations:
Receivable -12000 -8000 -20000
Inventory -24000 -16000 -40000
Equipment -30000 -20000 -50000
Accounts Payable -12000 -8000 -20000
Capital Adjusted 437,000 223,000 660,000
CASE 1 800000

Banana, Capital 111500

Carrots, Capital 111,500
To record the admission of Carrots to the partnership

Apple Banana Carrot Totals

Capital Unadjusted 515000 275000 790000
e in the revaluations:
Debit -78000 -163500 -241500
Credit 111500 111500
Capital Adjusted 437,000 111,500 111,500 660,000

Admissio
Before After
Partner Admission n of Admission
Carrot

Apple 60% 60%

Banana 40% -20% 20%
Carrot 20% 20%
Total 100% 100%

Cash 165000
Carrots, Capital 165000
To record the admission of Carrots to the partnership

Before Admissio After

Partner
Admission n of C Admission

Apple 437,000 437,000

 Banana 223,000 223,000
Carrot 165,000 165,000
Total 660,000 165,000 825,000

Admissio
Before After
Partner n of
Admission Admission
Carrot

Apple 60% (100-20)*60 48%

Banana 40% (100-20)*40 32%
Carrot 20% 20%
Total 100% 100%

CASE 3

Cash 100000
Apple, Capital 39000
Banana, Capital 26000
Carrots, Capital 165000
To record the admission of Carrots to the partnership

Admissio
Before After
Partner
Admission n of Admission
Carrots

Apple 437,000 -39,000 398,000

Banana 223,000 -26,000 197,000
Carrot 165,000 165,000
Total 660,000 100,000 760,000

CASE 4

Cash 165000
 Apple, Capital 24000
Banana, Capital 16000
Carrots, Capital 125000
To record the admission of Carrots to the partnership

Admissio
Before After
Partner n of
Admission Admission
Carrots

Apple 437,000 24,000 461,000

Banana 223,000 16,000 239,000
Carrot 125,000 125,000
Total 660,000 165,000 825,000

CASE 5

Adjusted net assets before admission of Carrots 660000

Divided by the interest of the old partners 3/5
Total 1100000
Multiply by the interest of Carrots 2/5
Amount to be contributed by Carrot 440000

A (50%) B (30%) C (20%)

Beg. Jan 1 320,000 192,000 128,000
Share in the Profit 400,000 240,000 160,000
Drawings -40,000 -60,000 -30,000
Total 680,000 372,000 258,000

Case 1

A, Capital 680,000
 B, Capital 12000
C, Capital 8000
Cash 700000
To record theretirement of A from the partnership

Before Retireme After

Partner
Retirement nt of A Retirement

A 680,000 -680,000 0
B 372,000 -12,000 360,000
C 258,000 -8,000 250,000
Total 1,310,000 -700,000 610,000

Before Retireme After

Partner
Retirement nt of A Retirement

A 50% -50% 0%
30/
B 30% (30+20) 60%
20/
C 20% (30+20) 40%
Total 100% 100%

Case 2

A, Capital 680,000
B, Capital 18000
C, Capital 12000
Cash 650,000
To record theretirement of A from the partnership

Before Retireme After

Partner
Retirement nt of A Retirement
 A 680,000 -680,000 0
B 372,000 18,000 390,000
C 258,000 12,000 270,000
Total 1,310,000 -650,000 660,000

SITUATION 120000

A B C Total
100000 Cash
160000 260000
50000 Equipment 120000 170000
150000 Total
160000 120000 430000
41860 Share
44651
in Profit 33488 120000
191860 Capital
204651 153488
Balances 550000

SITUATION 4

A, Capital 53226
B, Capital 56774
D, Capital 110000

A B C D Total
Before Admission 191860 204651 153488 0 550000
Admission of D -53226 -56774 0 110000 0
After Submission 138635 147877 153488 110000 550000

SITUATION 5

B, Capital 204651
Cash 164000
A, Capital 27101
C, Capital 13550
 A B C Total
Before Retirement 191860 204651 153488 550000
Retirement of B 27101 -204651 13550 -164000
After Retirement 218961 0 167039 386000

Partner Before Retireme After

Retirement nt of A Retirement

A 40% -40% 0%
40/
B 40% (40+20) 67%
20/
C 20% (40+20) 33%
Total 100% 100%

SITUATION 6
A B Totals
Cash 11,000 22,354 33,354
Accounts Receivable 214,536 532,890 747,426
Inventory 114,535 253,402 367,937
Land 603,000 603,000
Building 428,267 428,267
Equipment 50,345 34,789 85,134
Other Assets 0 0 0
Total Assets 993,416 1,271,200 2,265,118

Accounts Payable -178,940 -243,650 -422,590

Notes Payable -200,000 -345,000 -545,000
Net Assets 614,476 682,550 1,297,026

Adjusted net assets before admission of Carrots 1,297,026

 Divided by the interest of the old partners 80%
Total 1,621,283
Multiply by the interest of Carrots 20%
Amount to be contributed by Carrot 324,257

A (40%) B (40%) C (20%) Total

Adjusted capital balan 614,476 682,550 324,257 1,621,283
Required capital balan 648,513 648,513 324,257 1,621,283
Cash Settlement -34,037 34,037 -

A (40%) B (40%) C (20%)

Capital balances Jan 1 648,513 648,513 324,257
Share in Profit 130,000 130,000 65,000
Drawings -50,000 -65,000 -28,000
Capital balance Dec. 3 728,513 713,513 361,257

SITUATION 7
A B C Total
Before Retirement 600,000 600,000 400,000 1,600,000
Recaluation of equipment 8,000 8,000 8,000 24,000
Adjusted 608,000 608,000 408,000 1,624,000
Retirement of B -408,000 -408,000
After Retirement 608,000 608,000 0 1,216,000