Professional Documents
Culture Documents
B will contribute a land and building with carrying amount of P1,200,000 and fair value of
P1,500,000. The land and building are subject to a mortgage payable amounting to P300,000 to
be assumed by the partnership. The partners agreed that B will have 60% capital interest in the
partnership. The partners also agreed that C will contribute sufficient cash to the partnership.
On January 1, 2018, A, B and C formed ABC Partnership with original capital contribution of
P300,000, P500,000 and P200,000. A is appointed as managing partner.
During 2018, A, B and C made additional investments of P500,000, P200,000 and P300,000,
respectively. At the end of 2018, A, B and C made drawings of P200,000, P100,000 and
P400,000, respectively. At the end of 2018, the capital balance of C is reported at P320,000. The
profit or loss agreement of the partners is as follows:
On January 1, 2019, D is admitted to the partnership by purchasing 40% of the capital interest of
B at a price of P500,000.
On December 31, 2018, ABC Partnership’s Statement of Financial Positions shows that A, B and
C have capital balances of P500,000, P300,000 and P200,000 with profit or loss ratio of 1:3:6.
On January 1, 2019, C retired from the partnership and received P350,000. At the time of C’s
retirement, an asset of the partnership is undervalued.
On December 31, 2018, the Statement of Financial Position of ABC Partnership provided the
following data with profit or loss ratio of 5:1:4:
Current Assets 1,500,000 Total Liabilities 500,000
Noncurrent Assets 2,000,000 A, Capital 1,100,000
B, Capital 1,200,000
C, Capital 700,000
On January 1, 2019, D is admitted to the partnership by investing P500,000 to the partnership for
10% capital interest. The total agreed capitalization of the new partnership is P3,000,000.
On January 1, 2019, the partners decided to liquidate the partnership. All partners are legally
declared to be personally insolvent. The other noncash assets were sold for P1,500,000.
Liquidation expenses amounting to P100,000 were incurred.
On December 31, 2018, the Statement of Financial Position of ABC Partnership with profit or
loss ratio of 6:1:3 of partners A, B and C respectively, revealed the following data:
On January 1, 2019, the partners decided to liquidate the partnership. All partners are legally
declared to be personally insolvent. The other noncash assets were sold for P1,500,000.
Liquidation expenses amounting to P100,000 were incurred.