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    Let's Check: Ex. 1 Ex. 2

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    irahQ
    The document contains sample problems and solutions for partnership formation, adjustments, and various capital accounting methods. It works through examples calculating partner capital balances and adjustments under the bonus method and investment/withdrawal method. The comprehensive problem section provides a multi-step case applying different capital accounting methods to determine the adjusted capital balances for two partners.

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    Let's Check: Ex. 1 Ex. 2

    Uploaded by

    irahQ
    230 views3 pages
    The document contains sample problems and solutions for partnership formation, adjustments, and various capital accounting methods. It works through examples calculating partner capital balances and adjustments under the bonus method and investment/withdrawal method. The comprehensive problem section provides a multi-step case applying different capital accounting methods to determine the adjusted capital balances for two partners.

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    The document contains sample problems and solutions for partnership formation, adjustments, and various capital accounting methods. It works through examples calculating partner capital balances and adjustments under the bonus method and investment/withdrawal method. The comprehensive problem section provides a multi-step case applying different capital accounting methods to determine the adjusted capital balances for two partners.

    Copyright:

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

    Let's Check: Ex. 1 Ex. 2

    Uploaded by

    irahQ
    The document contains sample problems and solutions for partnership formation, adjustments, and various capital accounting methods. It works through examples calculating partner capital balances and adjustments under the bonus method and investment/withdrawal method. The comprehensive problem section provides a multi-step case applying different capital accounting methods to determine the adjusted capital balances for two partners.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    Name: Jerah Y.

    Torrejos
    Subject: ACP311 (29600)

    Let's Check

    Ex. 1 C.

    Ex. 2
    The amount that should be recorded as Jordan, Capital should be 55,000 because the
    computer was sold immediately after the formation of the partnership which represents
    the fair market value of the asset.

    Ex. 3 Rodman, Capital 40,000 40,000


    Will, Capital 80,000 2/3 80,000
    BJ, Capital - 1/3 60,000
    120,000 180000
    Therefore, Jordan should contribute 60,000 cash to have 1/3 interest in the partnership.

    Ex. 4 Ewing, Capital Barkley


    60% 40%
    300,000 70,000
    90,000
    -40,000
    120,000

    300,000 300,000
    120,000 80,000 200,000
    420,000 500,000
    Therefore, Barkley should contribute additional 80,000 cash.

    Ex. 5 BONUS METHOD


    Magic, Capital 100,000 92,000
    Kareem, Capital 84,000 8,000 92,000
    184,000 184,000
    Therefore, Kareem's identifiable assets are still debited for 84,000 pesos because
    under the Bonus method the capital will increase not the identifiable asset.
    Entry would be: Magic, Capital 8,000
    Kareem, Capital 8,000

    Ex. 6 BONUS METHOD


    Kg, Capital 140,000 140,000
    Paul, Capital 220,000 -60,000 160,000
    Ray, Capital - -
    TCC=TAC 300,000
    300,000/3= 100,000
    Therefore, the capital balance of Ray under Bonus method is 100,000.

    Ex. 7
    Tim, Capital 50,000 25,000 75,000
    Tony, Capital 80,000 80,000
    Manu, Capital 25,000 60,000 85,000
    240,000
    The question did not give the interest ratio of the partners, only the profit ratio. The
    capital of Tim, Tony, and Manu are 75,000, 80,000, and 85,000 respectively.
    Name: Jerah Y. Torrejos
    Subject: ACP311 (29600)

    Let's Check:
    COMPREHENSIVE PROBLEM:

    LONZO BRANDON
    Cash 28,000 62,000
    Receivables 200,000 600,000
    Inventories 120,000 200,000
    PPE 650,000 535,000
    Other Assets 2,000 3,000
    A/P (180,000) (250,000)
    N/P (200,000) (350,000)
    EQUITY 620,000 800,000

    ADJUSTMENTS
    LONZO, CAPITAL BRANDON, CAPITAL
    Beg. Balances 620,000 800,000
    Receivables
    (20,000) (40,000)
    Uncollectible
    Inventories (6,000) (7,000)
    Other Asset
    Write-Off (2,000) (3,000)
    TOTAL ADJUSTED 592,000 750,000
    CAPITAL

    1. The capital of Lonzo and Brandon upon formation are 592,000 and
    750,000 respectively.

    2. In Bonus Method, TAC is equal to TCC.


    Capital TCC
    TAC
    Ratio under Bonus Method
    Lonzo, Capital 592,000 40% 536,800
    Brandon, Capital 750,000 60% 805,200
    1,342,000 1,342,000
    The Bonus from Lonzo is 55,200 and is calculated by subtracting
    592,000 and 536,800

    3. Based on the calculation in no.2, the Adjusted Capital of Brandon is 805,200.

    Capital Adjusted Capital


    Ratio under Bonus Method
    Lonzo, Capital 592,000 60% 900,000
    Brandon, Capital 750,000 40% 600,000
    1,342,000 1,500,000
    4. The Bonus to Lonzo is 308,000 and is calculated by subtracting
    900,000 and 592,000.

    5. Based on the calculation in no.4, the adjusted capital of Lonzo will be 900,000.

    6. Under Investment/Withdrawal Method TAC is not equal to TCC.


    TCC
    TAC Capital under Investment
    Ratio Method
    Lonzo, Capital 592,000 40% 500,000
    Brandon, Capital Base 750,000 60% 750,000
    1,342,000 1,250,000
    Lonzo should withdraw 92,000 which is calculated from subtracting
    500,000 and 592,000.

    7. based on the calculation in no.6, the adjusted capital of Lonzo and Brandon
    are 500,000 and 750,000 respectively.

    Revaluation TAC Capital Revaluation Down


    Ratio
    592,000 592,000 40% 500,000
    888,000 750,000 60% 750,000
    1,480,000 1,342,000 1,250,000

    8. The adjusted capital of Lonzo would be 592,000.

    9. The adjusted capital of Brandon would be 888,000.

    10. The adjusted capital of Lonzo would be 500,000.

    11. The adjusted capital of Brandon would be 750,000.

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