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    Partnership Dissolution - Admission of A Partner

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    Mariella Olympia Panunciales
    The document outlines eight cases involving the admission of a new partner, Chloe, to an existing partnership between Dally and Lily through the purchase of an interest from Dally. It also outlines four additional cases involving the admission of a new partner, Pride, to an existing partnership between Porsche, Jaguar and Lexxus through additional cash investment. For each case, journal entries are to be prepared to record the admission and to compute the new profit and loss ratios.

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    Partnership Dissolution - Admission of A Partner

    Uploaded by

    Mariella Olympia Panunciales
    89 views3 pages
    The document outlines eight cases involving the admission of a new partner, Chloe, to an existing partnership between Dally and Lily through the purchase of an interest from Dally. It also outlines four additional cases involving the admission of a new partner, Pride, to an existing partnership between Porsche, Jaguar and Lexxus through additional cash investment. For each case, journal entries are to be prepared to record the admission and to compute the new profit and loss ratios.

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    Partnership Dissolution - Admission of a Partner

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    The document outlines eight cases involving the admission of a new partner, Chloe, to an existing partnership between Dally and Lily through the purchase of an interest from Dally. It also outlines four additional cases involving the admission of a new partner, Pride, to an existing partnership between Porsche, Jaguar and Lexxus through additional cash investment. For each case, journal entries are to be prepared to record the admission and to compute the new profit and loss ratios.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    89 views3 pages

    Partnership Dissolution - Admission of A Partner

    Uploaded by

    Mariella Olympia Panunciales
    The document outlines eight cases involving the admission of a new partner, Chloe, to an existing partnership between Dally and Lily through the purchase of an interest from Dally. It also outlines four additional cases involving the admission of a new partner, Pride, to an existing partnership between Porsche, Jaguar and Lexxus through additional cash investment. For each case, journal entries are to be prepared to record the admission and to compute the new profit and loss ratios.

    Copyright:

    © All Rights Reserved
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    (Admission by Purchase of an Interest – Overview of all possible cases)

    Dally and Lily are partners with capital balances of P120,000 and P90,000,
    respectively. Profits and losses are shared 75% to Dally and 25% to Lily.
    On May 18 of the current year, they agreed to admit Chloe to the
    partnership under each of the following independent cases.

    Instructions: Prepare journal entries to record the admission of Chloe in


    the partnership and compute for the new profit and loss ratio after her
    admission.

    Case 1 - Chloe purchases one-half of the interest of Dally for P60,000.


    Case 2 - Chloe purchases one-third of the interest in the partnership for
    P70,000.
    Case 3 – Chloe purchases one-half of the interest of Dally for P65,000.
    Case 4 - Chloe purchases one-third of the interest in the partnership for
    P80,000.
    Case 5 - Chloe purchases one-third of the interest in the partnership for
    P80,000 and it is agreed that the net assets should be revalued.
    Case 6 - Chloe purchases one-half of the interest of Dally for P55,000.
    Case 7 - Chloe purchases one-third of the interest in the partnership for
    P50,000.
    Case 8 - Chloe purchases one-third of the interest in the partnership for
    P50,000 and it is agreed that the net assets should be revalued
    (Admission by Investment – Bonus Approach)
    Porsche, Jaguar and Lexxus are partners of Cars Distributions, a used-car
    distribution partnership. The partners needed additional funds and thus
    decided to admit Pride, a new partner, by investing additional cash into
    the partnership. The partners had the following adjusted capital balances
    prior to the admission of Pride:

    Capital balance Share in the P&L


    Porsche P230,000 30%
    Jaguar 350,000 50%
    Lexxus 180,000 20%

    Instructions: Give the entries to record the admission of Pride and


    compute for the new profit and loss ratio under each of the following
    independent cases.

    Case 1 - Pride contributes P240,000 into the partnership at a total


    agreed capital of P1M.
    Case 2 - Pride invests sufficient cash for a 20% interest in the
    partnership.
    Case 3 - Pride invests P200,000 for a 25% interest in the partnership
    where total agreed capital is at P960,000.
    Case 4 - Pride invests P220,000 for 20% interest in total capital of
    P980,000.
    (Admission by Investment – Revaluation Approach)
    Porsche, Jaguar and Lexxus are partners of Cars Distributions, a used-car
    distribution partnership. The partners needed additional funds and thus
    decided to admit Pride, a new partner, by investing additional cash into
    the partnership. The partners had the following adjusted capital balances
    prior to the admission of Pride:
    Capital balance Share in the P&L
    Porsche P230,000 30%
    Jaguar 350,000 50%
    Lexxus 180,000 20%

    Instructions: Give the entries to record the admission of Pride and


    compute for the new profit and loss ratio under each of the following
    independent cases.

    Case 1 - Pride invests P200,000 for a 24% (20%) interest in the


    partnership where total agreed capital is at P1,000,000.
    Case 2 - Pride invests P300,000 for a 20% interest in the partnership
    where Pride is credited an agreed capital of P250,000.
    Case 3 - Pride invests P140,000 for a 25% interest in the partnership
    where Pride is credited P250,000.
    Case 4 - Pride invests P220,000 for a 25% interest in the partnership
    where total agreed capital is at P1,200,000.

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