COMPREHENSIVE PROBLEM:

On May 1, 2020, the business assets and liabilities of LONZO and BRANDON were as follows:

LONZOBRANDON

CashP28,000P62,000

Receivables200,000600,000

Inventories120,000200,000

Land, buildings, and equipment650,000535,000

Other assets2,0003,000

Accounts payable(180,000)(250,000)

Notes payable(200,000)(350,000)

LONZO and BRANDON agreed to form a partnership by contributing their net assets, subject to the following adjustments:

• Receivables of P 20,000 in LONZO's books and P 40,000 in BRANDON's books are uncollectible
• Inventories of P 6,000 and P 7,000 in the respective books of LONZO and BRANDON are worthless.
• Other assets in both books are to be written off.

REQUIREMENT:

1.Upon the partnership's formation, the respective capital of partners LONZO and BRANDON would be?

2.Under the Bonus Method, if the partner agreed to have a capital ratio of 40:60 for LONZO and BRANDON respectively, how much is the amount of bonus to or (from) LONZO?

3.Under the Bonus Method, if the partner agreed to have a capital ratio of 40:60 for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?

4.Under the Bonus Method, if the partner agreed to have a capital ratio of 60:40 for LONZO and BRANDON respectively and they further agreed to have a total capital of P 1,500,000, how much is the amount of bonus to or (from) LONZO?

5.Under the Bonus Method, if the partner agreed to have a capital ratio of 60:40 for LONZO and BRANDON respectively, and they further agreed to have a total capital of P 1,500,000, how much is the adjusted capital of LONZO?

6.If the partners agreed that LONZO should withdraw or invest in order to have a capital ratio of 40%, how much should be the amount of additional investment or withdrawal?

7.If the partners agreed that LONZO should withdraw or invest in order to have a capital ratio of 40%, how much is the adjusted capital of LONZO and BRANDON?

8.If the partner agreed to revalue assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of LONZO?

9.If the partner agreed to revalue assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?

10.If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of LONZO?

11.If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for LONZO and BRANDON respectively, how much is the adjusted capital of BRANDON?