Professional Documents
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Activity 1 Acc311
Activity 1 Acc311
2. Rosa and Linda agreed to form a partnership on June 15, 2012 for the purpose of
manufacturing and selling custom silver jewelry. Both are master crafters and have their
own tools and equipment, which they will invest in the business. Rosa and Linda
determined that their tools and equipment have fair market values of P90,000 and
P120,000, respectively. They further resolved to invest sufficient cash such that each
partner will have a beginning capital balance equal to P250,000. How much will be the
total cash of the newly formed partnership?
Solution:
Rosa Linda Total
3. On January 1, 2012 partners Aiko and Mina have capital balances of P500,000 and
P280,000, respectively. They share profit and losses equally. On this date, they decided
to admit Ruffa for a 40% interest in capital and profits. Ruffa paid P450,000 directly to
Aiko and Mina. How much should be the new capital balances of Aiko and Mina,
respectively?
Solution:
Partner Capital Balance
Aiko 500,000
Mina 280,000
Ruffa 450,000
Total Capital 1,230,000
Ruffa's Interest Rate 40%
Ruffa, Capital 492,000
Less: Cash payment (450,000)
Loss 42,000
Share on loss on
Capital admission Adjusted Balance
(42,000/2)
Aiko 500,000 (21,000) 479,000
Mina 280,000 (21,000) 259,000
4. The NPC Partnership has suffered financially due to poor results of operations for the
past three years. N, P and C share profits and losses in the ratio of 1:3:6 respectively.
The following is the condensed balance sheet as of March 31, 2012:
All the non-cash assets were sold for P1,820,000. How much should each partner
receive upon liquidation?
Solution:
Cash Non cash Liabilities N, Capital P, Capital C, Capital
assets (1/10) (3/10) (6/10)
Balance 270,000 2,020,000 (1,310,000) 210,000 390,000 380,000