Quiz.

PARTNERSHIP ADMISSION

Problem I. Blue Company

Anthony, Ben, and Charlie are partners in Blue Company. Their capital
balances as at July 31, 2021, are as follows:

Anthony, Capital Ben, Capital Charlie, Capital

450,000 150,000 300,000

Each partner has agreed to admit Daniel to the partnership.

Required:

Prepare the entries to record Daniel’s admission to the partnership under

each of the following conditions:

a. Daniel paid Anthony P125,000 for 20% of Anthony’s interest in the

partnership.
b. Daniel invested P200,000 cash in the partnership and received an
interest equal to her investment.
c. Daniel invested P300,000 cash in the partnership for 20% interest in the
business. A bonus is to be recorded for the original partners on the basis
of their capital balances.
d. Daniel invested P300,000 cash in the partnership for 40% interest in the
business. The original partners gave Daniel a bonus according to the
ratio of their capital balances on July 31, 2021.
 Problem II. Z Partnership
Lian and Kate are partners in Z Partnership with capital balances of
P550,000 and P350,000, respectively; they share income and loss in the
ratio 1:3, respectively. The partners are considering the admission of Ren.

Required:

Prepare the entries to record the admission of Ren under each of the
following independent situations:

1. Ren invested P100,000 cash in the partnership for a one-tenth

interest. The net assets of the partnership are fairly valued.
2. Ren invested P140,000 cash in partnership for a one-eight interest.
Assets of the partnership are fairly valued except for equipment,
which is undervalued by P80,000. Net assets of the partnership are to
be revalued and Ren is to be admitted.
3. Ren is to receive a one-tenth interest in the partnership upon
investing P180,000 cash. Net assets of the partnership are fairly
valued.
4. Ren is to receive a 20% interest in the partnership upon investing
P200,000 cash. Net assets of the partnership are fairly valued.