B Partners W and I agreed to sell to N, one fourth of their respective capital and profit and loss ratio for a total cash payment of P1,200,000. The capital balances and the respective percentage interests in profits and losses immediately before the sale to N are: Partner W | Profit and Loss 60% 40% 100% Capital Balance P2,500,000 1,500,000 P4,000,000 || | Assume assets are fairly valued. Q11 N purchases 1/4 interest in the partnership for P1,200,000, by how much would the capital of W and I be charged/debited as a result of the above purchase of interest by N? Q12 In relation to Q11, how much is the capital credit to N as a result of the above purchase? Q13 In relation to Q11, how much cash would be received by W and I, respectively from N as a result of the above purchase? Q14 In relation to Q11, what are the new profit and loss ratio between W, I and N, respectively immediately after the admission of N? Q15 In relation to Q11, what are the capital balances of W, I and N, respectively immediately after the admission of N? Assume assets are undervalued: Q16 N purchases interest in the partnership, by how much is the partnership assets undervalued? Q17 In relation to Q16, by how much would the capitals of W and I be credited to adjust the asset account? (increase in partnership assets)? Q18 In relation to Q16, how much would be the capital credit to N? Q19 In relation to Q16, how much shall be charged against the capitals of W and I, respectively to effect the purchase of interest/capital by N or to recognize the transfer of capital from W and I to N? Q20 In relation to Q16, what are the capital balances immediately after the admission of N? Note: For questions Q10-15, the assumption is that assets are fairly valued hence the transaction would be treated as if purchased at book value but for Q16-20 you will assume that the assets are undervalued. M, U and G are partners with capital balances of P600,000, P400,000 and P200,000, respectively. Profits and losses have been shared 3:2:1, respectively. G wishes to retire from the firm. (Answer the following questions, each item taken independently) Assume assets are fairly valued. (Sale of retiring partner's interest to an outsider) Q21 G's interest is sold to Wheels, a new partner for P250,000. How much is the total partnership capital immediately after the retirement of G? Test II Show A III Problems: Answer the requirements for each of the following unrelated problems: (75%) ( 30 items @ 2.5 points each). computations in good form: Bar and Bie are partners with capital balances of P400,000 and P200,000, respectively. They share profits and losses in the ratio of 3:2, respectively. The partners agree to admit Doll as a member of the firm. Assume assets are fairly valued: Q1 Q2 Q3 Q4 05 Q5 If Doll invests P120,000 for a 1/6 interest in the firm, how much will be the capital credit granted to Doll? In relation to Q1, how much is the total partnership capital immediately after the admission of Doll? If Doll invests P120,000 for a 1/4 interest in the firm, by how much will the capitals of Bar and Bie decreased, respectively, as a result of the admission of Doll? In relation to Q3, what are the capital balances of Bar, Bie and Doll, respectively after the admission of Doll? If Doll invests P120,000 for a 1/10 interest in the firm, by how much will the capitals of Bar and Bie increased, respectively as a result of the admission of Doll? Q6 In relation to Q5, what are the new profit and loss ratio immediately after the admission of Doll? Assume assets are overvalued: Q7 Q8 If Doll invests P120,000 for a 4 in the firm and that the partnership equipment is overvalued, by how much is the equipment overvalued? In relation to Q7, how much are the capital balances of BAR, BIE and DOLL, respectively immediately after the admission of DOLL? Assume assets are undervalued: Q9 If Doll invests P120,000 for a 1/10 interest in the firm and that the partnership inventories is undervalued, by how will the capitals of Bar and Bie increased, respectively as a result of the recognition of the undervaluation of inventories? Q10 In relation to Q9, what are the capital balances of Bar, Bie and Doll, respectively immediately after the admission of || = G? 22 III = and and IV Assume assets are fairly valued. (Sale of retiring partner's interest to remaining partners) Q22 G's interest is sold to the remaining partners, to M and to U for a total cash payment of P250,000. For how much would the capital of M and U be credited, respectively as a result of G's retirement from the partnership firm? Assume assets are fairly valued. (Sale of retiring partner's interest to the partnership firm) Q23 G receives P200,000 of partnership funds. How much is the partnership capital immediately after the retirement of Q24 G receives P250,000 of partnership funds for his interest. The remaining partners agree to absorb the excess payment to G? By how much would the capitals of M and U decreased, respectively as a result of the retirement of G? (bonus method) Q25 In relation to Q24, what are the capital balances of M and U, respectively, immediately after the retirement of G. Note: For questions 24-25, the bonus method is assumed. Q26 G receives P150,000 of partnership funds for his interest. How much are the amounts of the bonus credited to M and U, respectively as a result of the retirement of G? Q27 In relation to Q26, what are the capital balances of M and U, respectively immediately after the retirement of G. Note: For questions 26-27, the bonus method is assumed. Assume assets are undervalued. (Sale of retiring partner's interest to the partnership firm) Q28 G receives P250,000 of partnership funds for his interest that inventories are undervalued, by how much is the inventories undervalued? Q29 In relation to Q28, what are the the capital balances of M U, respectively immediately after the retirement of G? Assume assets are overvalued. (Sale of retiring partner's interest to the partnership firm) Q30 G receives P150,000 of partnership funds for his interest and that accounts receivable are overstated, by how the capitals of M, U and G be charged/debited, effect the adjustment on the accounts overstated? much would respectively to receivable which is