COMPUTATIONAL

QUESTION 5
Partners Nitz, Pat and Candy share profits and losses 50:30:20, respectively. The statement of financial
position at July 31, 2020 shows the following balances:

Cash 40,000 Accounts Payable 100,000

Other Assets 360,000 Nitz, Capital 74,000

Pat, Capital 130,000

Candy, Capital 96,000

TOTAL 400,000 TOTAL 400,000

The carrying amount of assets and liabilities are equal to their fair values. Emmie is to be admitted as a new
partner with a 20% capital interest and a 20% share of profits and losses in exchange for a cash contribution.
No bonus is to be effected.

● Emmie’s contribution should be 75000

QUESTION 6
X, Y, and Z are partners sharing profits in the ratio of 3:3:2, respectively. On July 31, their capital balances are
as follows: X, P280,000; Y, P200,000; and Z, P160,000. They agree to admit W on the following conditions:
a. W is to pay X P200,000 for ½ of X’s interest;
b. W is to invest P160,000 in the partnership;
c. Some assets of the partnership are undervalued by P160,000;
d. W’s interest is to be 25%.

● The total partnership capital immediately after the admission of W is 960000

● The capital balance of X immediately after the admission of W is 222500