NAME! SECTION: SCORE: PROFESSOR: Problem #16 Admission by Investment and Division of Profits hip The condensed statement of financial position of Matuguinas and Sorima on Dec. 31, 2015, follows: Matuguinas and Sorima Statement of Financial Position December 31, 2015 Assets Current Assets Plant Assets (net) P100,000 500,000 Liabilities and Partners' Capital Liabilities P300,000 Matuguinas, Capital 200,000 Sorima, Capital 100,000 Total P600,000 Total P600,000 Matuguinas and Sorima shared profits or losses 40% and 60%, respectively. On Jan. 2, 2016, Pateno was admitted to the partnership by investing the net assets of her highly profitable proprietorship. The partners agreed to the following current fair values of the identifiable net assets of Pateno's proprietorship: Current Assets P 70,000 Plant Assets 230,000 Total Assets PALS 000 300000 Less: Liabilities 200,000 Net Assets P100,000 Pateno's capital account was credited for P120,000. The partners agreed further that the current fair values of the net assets of Matuguinas and Sorima were equal to their carrying amounts and that the accounting records of the old partnership should be used for the new partnership. The following partner-remuneration plan was adopted for the new partnership: a. Salaries of P10,000 to Matuguinas, P15,000 to Sorima, and P20,000 to Pateno. b. A bonus of 10% of income after salaries and bonus to Pateno. C. Balance: 30% to Matuguinas, 40% to Sorima, and 30% to Pateno. For the year ended Dec 31, 2016, the profit of the partnership is P78,000 before salaries and bonus to Pateno. Required: Prepare the journal entries to record the following: 1. The admission of Pateno to be partnership on Jan. 2, 2016. 2 The income distribution for the year ended Dec 31, 2016. Dissolution - Changes in Ownership | 159