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Questions:
a. What is the value of the building contributed by Alex? Justify your answer in no more than three (3)
sentences.
2. Cyril, Joseph, and Reggie formed a partnership named CJR Partnership Ltd. Cyril contributed cash of
P150,000 and his store equipment that originally cost P160,000 with a second value of P125,000.
Joseph will contribute P180,000 cash, while Reggie, whose family sells computers, will contribute
P250,000 cash and a brand-new computer that cost his family’s computer dealership P150,000 but with
a regular selling price of P160,000. They agreed to share profits and losses equally.
Questions:
a. Assuming that you are hired as the new accountant of the new partnership, how will you record the
contributions made by Cyril and Reggie? Justify your answer in no more than three (3) sentences.
1. Partners MM and LL have profit and loss agreement with the following provisions: salaries of P30,000
and P45,000 for MM and LL, respectively; a bonus to MM of 10% net income after salaries and bonus;
and interest of 10% on average capital balances of P20,000 and P35,000 for MM and LL, respectively.
One-third of any remaining profits will be allocated to MM and the balance to LL. If the partnership had
a net income of P104,500, how much should be allocated to MM, assuming the provisions of the profit
and loss agreement are ranked by order of priority, starting with salaries?
2. Renalie and Ben are partners who share profits and losses in the ratio of 6:4, respectively. On June 1,
20X2, their respective capital accounts were as follows:
• Renalie - P60,000
• Ben - P50,000
On the same date, Jeremiah was admitted as a partner with 1/5 interest in capital and profits for an
investment of P40,000.
What is the capital of Ben after Jeremiah’s admission if the partnership began with a total capital of:
a. P150,000
b. P200,000
1. Partners Gaylee, Jandra, and Debby have capital balances of P50,000, P90,000, P20,000, respectively.
They split profits in the ratio of 4:4:2, respectively. Under a safe cash distribution plan, who among the
partners will get the first distribution? Justify your answer by showing your solution.
2. The following condensed balance sheet is presented for the partnership of Joseph and Emman, who
share profits and losses in the ratio of 60:40, respectively:
The partners decided to liquidate the partnership. If the assets are sold for P345,000, what amount of
the available cash should be distributed to Emman? Show your solution.