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    ACC111 Partnership-Formation

    Uploaded by

    Berna Lagrada
    Red, White, and Blue form a partnership on May 1, 2019 where Red contributes office equipment worth P40,000, White contributes delivery equipment worth P80,000, and Blue wants a one-third interest in capital and profits. For Blue to have a one-third interest, he should contribute P60,000 in cash.

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    © All Rights Reserved
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    ACC111 Partnership-Formation

    Uploaded by

    Berna Lagrada
    52 views3 pages
    Red, White, and Blue form a partnership on May 1, 2019 where Red contributes office equipment worth P40,000, White contributes delivery equipment worth P80,000, and Blue wants a one-third interest in capital and profits. For Blue to have a one-third interest, he should contribute P60,000 in cash.

    Original Title

    ACC111_partnership-formation

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    Red, White, and Blue form a partnership on May 1, 2019 where Red contributes office equipment worth P40,000, White contributes delivery equipment worth P80,000, and Blue wants a one-third interest in capital and profits. For Blue to have a one-third interest, he should contribute P60,000 in cash.

    Copyright:

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

    ACC111 Partnership-Formation

    Uploaded by

    Berna Lagrada
    Red, White, and Blue form a partnership on May 1, 2019 where Red contributes office equipment worth P40,000, White contributes delivery equipment worth P80,000, and Blue wants a one-third interest in capital and profits. For Blue to have a one-third interest, he should contribute P60,000 in cash.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    You are on page 1of 3

    Red, White, and Blue form a partnership on May 1, 2019.

    They agree that Red will contribute


    office equipment with a total fair value of P40,000.00; White will contribute delivery equipment
    with a fair value of P80,000.00; and Blue will contribute cash. If Blue want a one third interest in
    the capital and profits, he should contribute the following of cash:

    Solution:
    Red: P40,000
    White: 80,000
    Total P120,000
    Divided by: 2/3
    Total capital P180,000 (partnership capital)
    Less: 120,000
    Blue, capital P 60,000

    Solution:
    Julio, Capital:
    Cash P100,000
    Land 300,000
    Mortgage (50,000)
    Total P 350,000
    Elsa and Perla form a new partnership. Elsa invests P300,000.00 in cash for her 60 percent
    interest in the capital and profits of the business. Perla contributes land that has an original cost
    of P40,000.00 and a fair market value P70,000.00, and a building that has a tax basis of
    P50,000.00 and a fair market value of P90,000.00. The building is subject to a P40,000.00
    mortgage that the partnership will NOT assume. What amount of cash should Perla contribute to
    make her contribution equal to her 40% interest in the partnership?

    Solution:
    Elsa, capital P 300,000
    Divided by: 60%
    Total capital P 500,000

    Perla, Capital (agreed) = P500,000 * 40%


    Perla, Capital (agreed) = P200,000

    Agreed Capital P200,000


    Contributed capital:
    Land P70,000
    Building 90,000
    Total (160,000)
    Cash P 40,000

    Solution:
    Reyes, capital: Santos, capital:
    Cash P200,000 Cash P300,000
    Equipment 150,000 Inventory 150,000
    Building 400,000
    Mortgage (100,000)
    Total P350,000 Total P750,000
    Cash P300,000
    Inventory 150,000
    Building 400,000
    Santos, Capital P750,000
    Mortgage payable 100,000

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