Problem #3

Formation of a Partnership

Gogola and Paglinawan have just formed a partnership. Gogola contributed cash of P1260000 and computer equipment
that cost P540000. The fair value of the computer is P360000. Gogola has notes payable on the computer of P120000 to
be assumed by the partnership. Gogola is to have 60% capital interest in the partnership. Paglinawan contributed only
P900000. The partners agreed to share profit and loss equally.

Gogola should make an additional investment of (withdrawal) of ______

*Gogola
Cash 1260000
Equipment 360000
Notes Payable 120000
Gogola, Capital 1500000
*Paglinawan
Cash 900000
Paglinawan, Capital 900000
Gogola is to have 60% capital interest in the partnership.
900000/.40 = 2250000*.60 = 1350000
*Gogola
Cash 1110000
Equipment 360000
Notes Payable 120000
Gogola, Capital 1350000

*Paglinawan
Cash 900000
Paglinawan, Capital 900000