Problem #1
The capital accounts of the Maniquiz and Monte partnership on Sept. 30, 2019 were:
Maniquiz, Capital (75% profit percentage) 140,000
Monte, Capital (25% profit percentage) 56,000
Total Capital 196,000
On Oct. 1, Galang was admitted to a 35% interest in the partnership when he purchased 35% of
each existing partner’s capital for 100,000, paid directly to Maniquiz and Monte.
Required:
Determine the capital balances of Maniquiz, Monte and Galang after Galang’s admission to the
partnership.
Problem #2
The capital accounts of Loida Cardenas and Cristina San Jose have balances of 150,000 and
110,000, respectively. Daria Labalan and Helen Magada are to be admitted to the partnership.
Labalan buys one-fifth of Cardenas’ Interest for 35,000 and one-fourth of San Jose’s Interest for
25,000. Magada contributes 70,000 cash to the partnership, for which she is to receive an
ownership equity of 70,000.
Required:
1.) Journalize the entries to record the admission of Labalan and Magada.
2.) What are the capital balances of each partner after the admission of the new partners?
Problem #4
Resulta and Magpantay are partners sharing profits on a 60:40 ratio. A Statement of Financial
Position prepared for the partners on April 1, 2019 follows:
Cash P 480,000 Accounts Payable P 890,000
Accounts Receivable 920,000 Resulta, Capital 1,330,000
Inventories 1,650,000 Magpantay, Capital 1,080,000
Equipment P 700,000
Less: Accumulated
Depreciation 450,000 250,000
Total Assets P 3,300,000 Total Liabilities & Capital P 3,300,000
On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are
summarized below:
Assets and liabilities are to be restated as follows:
a. An allowance for possible uncollectibles of P45,000 is to be established.
b. Inventories are to be restated at their present replacement value of P 1,700,000.00.
c. Accrued expenses of P40,000 are to be recognized.
Resulta, Magpantay and Tria will divide profits in ratio of [Link]. Capital balances of the partners
after the formation of the new partnership are to be in the stated ratio, with Resulta and
Magpantay making cash settlement between themselves outside of the partnership to adjust their
capitals, and Tria investing cash in the partnership for his interest.
Determine how much cash is to be invested by Tria.
Problem #5
Geron, Aglugub and Onate have equities in a partnership of P500,000, P800,000, and P700,000,
respectively, and share profits and losses in a ratio of [Link], respectively. The partners have agreed
to admit Retada to the partnership.
Required:
Prepare the journal entries to record the admission of Retada to the partnership under each of the
following assumptions:
1. Retada invested P400,000 for a 25% interest, and bonus is recorded for Retada
2. Retada invested P800,000 for a 20% interest, and bonus is recorded for the old partners.
Problem #6
After the tangible assets have been adjusted to fair values, the capital accounts of Rey Refozar and
Rogelio Ceradoy have balances of P75,000 and P125,000, respectively. Jiexel Manongsong is to be
admitted to the partnership, contributing P50,000 cash to the partnership, for which he is to
receive an equity of P65,000. All partners share equally in profit.
Required:
1. Prepare the journal entry to record the admission of Manongsong who is to receive a bonus of
P15,000.
2. Calculate the capital balances of each partner after the admission of the new partner.
Problem #8
Castro and Falceso are partners who share profits and losses in a ratio of 2:3, respectively and
have the following capital balances on September 30, 2020: Castro, Capital, P100,000 Cr. and
Falceso, Capital, P150,000 Cr. The partners agreed to admit Garachico to the partnership.
Required:
Calculate the capital balances of each partner after the admission of Garachico, assuming that
bonuses are recorded when appropriate for each of the following assumptions:
1. Garachico paid Castro P50,000 for 40% of his interest.
2. Garachico invested P50,000 for a one-sixth interest in the partnership.
3. Garachico invested P50,000 for a 25% interest in the partnership.
4. Garachico invested P50,000 for a 15% interest in the partnership.
5. Garachico invested P50,000 for a 20% interest in the partnership. Assets of the partnership
are fairly valued except for equipment, which is overvalued by P50,000. Net assets of the
partnership are to be revalued upon admission of Garachico.
