Bel and May have capital balances of P900,000, and P1,300,000 as of December 31, 2020. Bel and May share 40% and 60% in the profits and losses. The partners believe that the following assets should be adjusted Accounts receivable - (book value)- P240,000; (market value) P200,000 Inventory -(book value)- P400,000, (market value) P450,000 Len is interested in buying 40% interest from anyone of the partner. After recording the adjustments, the revised capital of Bel is Select the correct response: P904,000 P910,000 P900,000 P906,000

Bel and May have capital balances of P900,000, and P1,300,000 as of December 31, 2020. Bel and May share 40% and 60% in the profits and losses. The partners believe that the following assets should be adjusted Accounts receivable - (book value)- P240,000; (market value) P200,000 Inventory -(book value)- P400,000, (market value) P450,000 Len is interested in buying 40% interest from anyone of the partner. After recording the adjustments, the revised capital of Bel is Select the correct response: P904,000 P910,000 P900,000 P906,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Partners Biore and Selisana each have a P450, 000 capital balance andshare profits and losses in a 3:2 ratio, respectively. Cash equals P150, 000,non-cash assets equal P1, 500, 000, and liabilities equal P750, 000.7. If the non-cash assets are sold for P1, 000, 000, the change in Selisana’scapital account will bea. an increase of P500, 000b. a decrease of P250, 000c. a decrease of P200, 000d. an increase of P400, 000 8. If the non-cash assets are sold for P700, 000 and each partner ispersonally insolvent, upon liquidation Selisana will receive a cash distributionofa. P100, 000b. P50, 000c. P130, 000d. P0
X, Y, and Z are partners sharing profits and losses in the ratio of 5:3:2. During the year, their investments and withdrawals are as follows: Investment of X, Y, and Z for P200,000, P175,000 and P375,000 respectively. Withdrawals of X, Y, and Z amounting to P125,000, P62500 and P62,500 respectively. On December 31, 2021, the partners decided to liquidate their business. After exhausting partnership assets, liabilities of P125,000 remain unpaid. X is personally insolvent. The gain or loss on realization is:
For the year 2021, the partnership of AMMAR and BANU realized a net profit of P240,000. The capital accounts of the partners show the following postings: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 AMMAR Debit Credit Debit Credit 20,000 10,000 120,000 BANU 10,000 10,000 5,000 80,000 20,000 Question 5 If the profits are to be divided based on average capital, how much will be the share of AMMAR?
Explain with solution Partners Biore and Selisana each have a P450,000 capital balance and share profits and losses in a 3-2 ratio, respectively. Cash equals P150,000, non-cash assets equal P1,500,000, and liabilities equal P750,000. If the non-cash assets are sold for P700,000 and both partners agree to make up for any capital deficits with personal cash contributions, upon liquidation Selisana will receive a cash distribution of a. P100,000. b. P50,000. CP130,000. d. P0
The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000
On November 10, 2020, Maher, Saher, and Taher, partners of Maher, Saher, & Taher LLP, had capital account balances of $40,000, $50,000, and $18,000, respectively, and shared net income and losses in a 4 : 2 : 1 ratio respectively. the Capital per unit of income sharing ratio for Maher would be: a. $40,000. b. $10,000. c. $20,000. d. $25,000.
Partners Biore and Selishana each have P450,000 capital balance and share profits and losses in a 3:2 ratio. Cash equals P150,000, non-cash assets equal P1,500,000 and liabilities equal P750,000. If non-cash assets are sold for P1,000,000, the change in Selishana's capital account will be:
Partners Matero and Malaya each have a P200,000 capital balance and share profits and losses in a 3:2 ratio, respectively. Cash equals P100,000, non-cash assets equal P600,000, and liabilities equal P300,000. 1.If the non-cash assets are sold for P350,000, then Matero’s capital account will a. decrease by 105,000 b. decrease by 150,000 c. increase by 210,000 d. decrease by 210,000 2. If the non-cash assets are sold for P250,000, and each partner is personally insolvent, Malaya eventually will receive cash of a. 100,000 b. 0 c. 50,000 d. 60,000
AA and BB are partners engaged in a manufacturing business. Transactions affecting the partners’ capital accounts in 2022 are as follows: AA BB Debit Credit Debit Credit Beg. Balance P250,000 P350,000 April 1 150,000 100,000 June 30 125,000 250,000 September 1 225,000 300,000 October 1 350,000 200,000 The income summary has a debit balance of P225,000. Agreement between AA and BB are as follows: Interest on average capital at 8%. Salaries of P125,000 and P175,000 are given to AA and BB, respectively. Bonus to BB at 25% of net income after deducting interest and salaries but before deducting bonus. Balance is to be divided equally. How much is the net increase (decrease) in BB’s capital account in 2022?
The partners have agreed that: • Profit and losses are to be shared equally. • Interest on Drawings is at 3% per year. • Interest on Capital is at 5% per year. Required: a. Prepare the Profit and Loss Appropriation Account for the year ending 31 December 2022. b. The Partners’ Current Account for the year 2022. Don't give answer in image format
On December 31, 2020, the Statement of Financial Position of DTS Co. has the following balances: Total Assets Php225,000; VM Loan Php12,500; VM Capital P51,875; MR Capital Php48,125 and LP Capital Php112,500. The partners share profits and losses in the ratio of 25% to VM, 25% to MR, and 50% to LP. It was agreed among the partners that VM retires from the partnership and the partnership assets be adjusted to their fair value of Php255,000 as of December 31, 2020. The partnership also suffered net loss of Php75,000. The partnership would pay VM Php54,250 cash for his total interest in the partnership. What is the total capital of MR after retirement of VM?
According to Profil and Loss Account, the net profit for the year is OMR250,000. The total interest on partner's capital is OMR BOLO00 and interest on partner's drawings is OMR 30.000 The net profit as per Profit and Loss Appropriation Account will be OMR 110.000 (Prolit) OMR 200,000(Loss) OMR 200,000(Protit) OMR 200000 (Profit)