ASAP.

A partnership had the following condensed balance sheet:

Assets Liabilities and Capital

Cash.........................................P 2,500 Liabilities.................................................P 7,500

Noncash assets.......................... 32,500 XX, capital 80%)....................................... 20,000

XX, loan..................................... 2,500 YY, capital(20%)....................................... 10,000

Total.........................................P37,500 Total......................................................P37,500

The percentages in parentheses after the partner's capital balances represent their respective interests in profits and losses. The partners agree to admit ZZ as a member of the firm.

Situation 1: ZZ purchases a interest in the firm. One-fourth of each partner's capital is to be transferred to the new partner. ZZ pays the partners P7,500 which is divided between them in proportion to the equities given up. The capital balances of XX, YY, and ZZ after should be:

XX YY ZZ XX YY ZZ

a. P15,000 P 7,500 P 9,375 c. P15,000 P7,500 P7,500

b. 12,500 12,500 12,500 d. 10,000 10,000 10,000

Situation 2: ZZ invests P10,000 in cash for ownership interest. The money goes to the original partners

1. The capital balances of XX, YY, ZZ after the admission assuming if book value method is used should be:

XX YY ZZ XX YY ZZ

a. P15,000 P 7,500 P 9,375 c. P15,000 P7,500 P7,500

b. 12,500 12,500 12,500 d. 10,000 10,000 10,000

2. The partnership gain (or gain to be recognized in partnership books).

a. P 0 c. P 2,500 b. P625 d. P10,000

3. The gain to be recognized by XX and YY

a. P 0 c. P 2,500 b. P625 d. P10,000

4. If revaluation/adjustments in assets are recognized, the capital balances of XX, YY and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P15,000 P7,500 P 9,375 c. P15,000 P7,500 P 7,500

b. P19,500 P8,625 P10,000 d. P21,000 P9,000 P10,000

Situation 3: ZZ purchases a interest in the firm. One fourth of each partner's capital is to be transferred to the new partner. ZZ pays the partners P6,000, which is divided between them in proportion to the equities given up.

1. The capital balances of XX, YY, and ZZ after the admission if book value method (no adjustments/no revaluation) method is used should be:

XX YY ZZ XX YY ZZ

a. P15,000 P 7,500 P 9,375 c. P15,000 P 7,500 P 7,500

b. P12,500 P12,500 P12,500 d. P10,000 P10,000 P10,000

2. The partnership loss (or loss to be recognized in partnership books).

a. P 0 c. P3,375 b. P1,500 d. P6,000

3. The loss to be recognized by XX and YY

a. P 0 c. P3,375 b. P1,500 d. P6,000

4. If revaluation/adjustments in assets are recognized, the capital balances of XX, YY, and ZZ after the admission should

be:

XX YY ZZ XX YY ZZ

a. P15,000 P7,500 P9,375 c. P15,000 P 7,500 P7,500

b. 11,400 6,600 6,000 d. 21,000 9,000 10,000

Situation 4: ZZ invests P15,000 for a 1/3 interest in the firm. The total agreed capital is P45,000. The capital balances of

XX, YY and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P15,000 P7,500 P10,000 c. P15,000 P 7,500 P15,000

b. 21,500 10,375 10,000 d. 20,000 10,000 15,000

Situation 5: ZZ invests P12,500 for a interest in the firm. The total agreed capital is P42,500.

1. The capital balances of XX, YY, and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P15,000 P 7,500 P 9,375 c. P15,000 P 7,500 P 7,500

b. 21,500 10,375 10,625 d. 21,000 9,000 10,000

2. The new profit and loss of all partners after ZZ's admission should be:

XX YY ZZ XX YY ZZ

a. 50% 25% 25% c. 33% 33% 34%

b. 80% 20% 25% d. 60% 15% 25%

Situation 6: New partner ZZ conveyed a tangible assets with a fair value of P16,250 with an assumed mortgage of P2,500

in exchange for a 35% interest in capital, keeping in mind that ZZ would be acquiring a interest in profits. The capital

balances of XX, YY, and ZZ after the admission if bonus method is used should be:

XX YY ZZ XX YY ZZ

a. P18,750 P9,687.50 P15,312.50 c. P15,000 P7,500 P7,500

b. 21,500 10,375 10,625 d. 21,000 9,000 10,000

Situation 7: New Partner ZZ conveyed non-cash assets with a fair value of P7,500 in exchange for a 30% interest in capital

and a 1/5 interest in profits. The total agreed capital after admission is P40,000.

1. The capital balances of XX, YY, and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P18,400 P9,600 P12,000 c. P15,000 P7,500 P7,500

b. 21,500 10,375 10,625 d. 21,000 9,000 10,000

2. The new profit and loss of all partners after ZZ's admission should be:

XX YY ZZ XX YY ZZ

a. 50% 25% 25% c. 33% 33% 34%

b. 60% 15% 25% d. 64% 16% 20%

Situation 8: ZZ invests P7,500 for a 40% interest in the firm:

1. If bonus method is recognized, the capital balances of XX. YY and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P20,000 P10,000 P20,000 c. P14,000 P10,000 P15,000

b. 20,000 10,000 7,500 d. 14,000 8,500 15,000

2. If goodwill method is recognized, the capital balances of XX, YY and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P20,000 P10,000 P20,000 c. P15,000 P 7,500 P 7,500

b. P20,000 P10,000 P 7,500 d. P14,000 P 8,500 P15,000

3. If goodwill/adjustment in assets method is recognized and the goodwill allotted to YY amounted to P1,000, the

capital balances of XX, YY and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P20,000 P10,000 P10,000 c. P20,000 P10,000 P 7,500

b. P24,000 P11,000 P 7,500 d. P14,000 P 8,500 P15,000

Situation 9: ZZ invests P20,000 in the firm, P5,000 is considered a bonus to Partners XX and YY.

XX YY ZZ XX YY ZZ

a. P16,000 P 9,000 P 7,500 c. P20,000 P10,000 P 7,500

b. 24,000 11,000 15,000 d. 14,000 8,500 15,000

Situation 10: ZZ invests P20,000 in the firm and is allowed a credit of P6,000 for goodwill upon admission.

XX YY ZZ XX YY ZZ

a. P16,000 P9,000 P15,000 c. P20,000 P10,000 P26,000

b. 24,000 1,000 15,000 d. 24,000 11,000 26,000

Situation 11: ZZ invests P15,000 for a 37.5% interest in the firm. The total firm capital is to be P40,000 and partners agree

that their capital balances should be made to equal to their new profit and loss ratio.

1. How do you account for the difference in total capital before and after admission and how much?

a. Goodwill, P 0 c. Bonus, P5,000

b. Withdrawal, P5,000 d. Negative goodwill, P5,000

2. The capital balances of XX, YY, and ZZ after the admission should be:

XX YY ZZ XX YY ZZ

a. P18,400 P 9,600 P12,000 c. P16,000 P9,000 P15,000

b. P21,500 P10,375 P10,625 d. P20,000 P5,000 P15,000

3. The new profit and loss of all partners after ZZ's admission should be:

XX YY ZZ XX YY ZZ

a. 50% 12.5% 37.5% c. 33% 33% 34%

b. 80% 20.0% - d. 64% 16% 20%