COMPUTATIONAL

QUESTION 8 - 1 of 2
Partners Ellie, Ollie, and Millie agreed to sell to Tillie ¼ of their respective capital and profit and loss interest for
a total cash payment of P160,000. The capital balances and the respective percentage interest in profits and
losses immediately before the sale to Tillie are

PARTNER P/L CAPITAL BALANCE

Ellie 50% 320,000

Ollie 30% 180,000

Millie 20% 60,000

● The capital balance of Ollie immediately after Tillie’s admission is 135000

● From the sale of portion of his interest sold to Tillie, Ellie would receive 80000 91429 90000

QUESTION 9
Sophia purchased ½ of Jay’s interest and share in profit in the JC Partnership by paying Jay P180,000.
Immediately before Sophia’s admission, the capital balances of Jay and Chris were P240,000 and P400,000,
respectively. Jay and Chris were sharing profits in the ratio 2:3, respectively.

● The capital balances of Sophia immediately after her admission is 120000

● In the new profit and loss ratio, Chris would have 30 (percent)
● In the new profit and loss ratio, Jay would have 20 (percent)

QUESTION 10
Luke and Mark, who share profits and losses equally, agree to take John into the partnership for a 40% share
in capital and profits. Luke and Mark retain 30% interest each. Luke and Mark have capital balances of
P100,000 and P140,000, respectively before the admission of John. John pays P120,000 directly to Luke and
Mark for his 40% interest. All assets of the partnership, except land, are fairly valued.

● Land is undervalued by 60000

● The capital balance of Mark after the admission of John is 102000