PROBLEM 1

1
Cash 60,000
Inventory 10,000
Equipment 180,000
Notes Payable 50,000
Kenny, Capital 200,000
To record contributed asset of Kenny.

Cash 40,000
Equipment 60,000
Jenny, Capital 100,000
To record contributed asset of Jenny.

2
Beggining Capital Balance of Jenny and Kenny before admission of Lenny

Jenny Kenny
Beginning Capital Balance 100,000 200,00
Interest on beggining Capital Balance 10,000 20,000
Salary 15,000 20,000
Remainder 48,000 72,000
173,000 312,000

Remainder
Partnership Income 185,000
Less:Interest on Beggining Capital 30,000
Salary 35,000
Total Remainder 120,000

Kenny Remainder Jenny Remainder

120,000x 3/5 120,000x2/5
72,000 48,000

Entry for Admission of Lenny

Cash 175,000
Lenny, Capital 110,000
Jenny , Capital 26,000
Kenny, Capital 39,000

Book Value =485,000 + 175,000

 660,000 2:3 Profit Sharing Ratio To Jenny and Kenny

Lenny, Capital 660,000 x1/6 Jenny, Capital Kenny, Capital

110,000 65,000 x 2/5 65,000 x 3/5
26,000 39,000
175,000-110,000
65,000

3
Cash Priority Program
Jenny, Kenny and Lenny Partnership
Cash Priority Program
December 31,2022

Jenny (30%) Kenny (50%) Lenny (20%)

Capital Balances 200,000 400,000 200,000
Partner's Loan -50,000
Total Partner's Interest 200,000 350,000 200,000
Divide By 30% 50% 20%
Loss Absorption Capacity 666,666.67 175,000 1,000,000
(900,000 - 666,666.67)
Then Multiply it to 20%
get the payment to Lenny 333,333.33
666,666.67 175,000.00 666,667
(666,666.67-40,000)
Then Multiply it to 50% to get
The payment to Kenny 491,666.67
Multiply it to 20% to get the
payments to Lenny 491,666.67
175,000 175,000 175,000

1. The first P 20,000 cash available to partner's should be pait to Lenny.

2. The next P 163,333.34 should be paid to Kenny and Lenny in the ratio 50:20.
3. Amount in excess P 183,333.34 should be paid to Jenny,Kenny and Lenny in the profit and loss Ratio of 30:50:20.
 Payments To
Jenny Kenny Lenny

66,666.67

147,500

98,333.33
136,666.67 46,666.67

oss Ratio of 30:50:20.

DATE PARTICULARS DEBIT
Sep. 01 Subscription Receivable(125,000x30) 3,750,000
Subscribe Share Capital-Ordinary (125,000-20,000)
Share Premium-Ordinary
To record subscription for 125,000 shares at 30 pre share.

Downpayment 40% Subscription Price 1,500,000

Cash
To record downpayment received from subscriber's.

8 Land 750,000
Common Stock(25,000 share x20 par)
Share Premium-Ordinary(750,000value-500,000 par)
To record the receipt of land for capital stock.

15 Cash(3,750,000x30%) 1,125,000
Subscriber's Receivable
To record first installment from subscriber's.

30 Cash(3,750,000x30%) 1,125,000
Subscriber's Receivable
To record final installment from subscriber's.

Subscribe Common Share Capital (125,000x20par) 2,500,000

Common Share Capital
CREDIT

2,500,000
1,250,000

1,500,000

500,000
250,000

1,125,000

1,125,000

2,500,000
 Number Amount Total Percent
Ordinary Share 500 60 30,000 60%
Preference Share 300 40 12,000 40%
42,000 100%

Allocation Ordinary Preference

Issue Price 42,000 42,000
Allocation % 60% 40%
Total 25,200 16,800

Market Value Fraction Allocation Par Value Premium

Prefference Share 12,000 Dec-42 12,000 9,000
Ordinary Share 30,000 30/42 30,000 25,000
42,000 42,000 34,000

Cash 42,000
Preference Share Capital 9,000
Share Premium- Preference 3,000
Ordinary Share Capital 25,000
Share Premium- Ordinary 5,000
To record issuance of Shares.