Garachico invested P100,000 for a one-third interest in a partnership in which the other partners have capital totalling P260,000 before admitting Garachico. After distribution of the bonus, ehat is Garachico's capital?

a. P53,330

b. P86,670

c. P100,000

d. P120,000

Problem #1

Gregorio is retiring from the partnership of Guerra, Guillermo, And Gregorio. The profit and loss ratio is 2:2:1, respectively. after the accountant has posted the revelation and closing entries, the credit balances in the capital accounts are: Guerra, P530,000; Guillermo, P430,000; and Gregorio, P210,000

Required: Journalize the journal entries to record the retirement of Gregorio under each of the following unrelated assumptions:

1. Gregorio retires taking P210,000 of partnership cash for her equity.
2. Gregorio retires taking P270,000 of partnership cash for her equity.

Problem #2

On Jan. 31, 2019, Partners Abad, Ramos and Cammayo had the following loan and capital account balances (after closing entries for Jan.):

Loan receivable from Abad P20,000 dr

Abad payable to Cammayo 60,000 cr

Abad, Capital 30,000 dr

Ramos, Capital 120,000 cr

Cammayo, capital 70,000 cr

The partnership's income-sharing ratio was Abad, 50%; Ramos, 20%; and Cammayo, 30%. On Jan. 31,2018, Gonzales was admitted to the partnership for a 20% interest in total capital of the partnership in exchange for an investment of P40,000 cash.

Prior to Gonzales's admission, the existing partners agreed to increase the carrying amount of the partnership's inventories to current fair value, a P60,000 increase.

Required:

Prepare the journal entries the increase in inventories and the admission of Gonzales.