PARTNERSHIP FORMATION

Theory Problem Solving

1. D 1. B
2. C Peko
3. B Cash 300,000
4. C Accounts Receivable (150,000 - 25,000) 125,000
5. A Inventory (at fair value) 180,000
Adjusted capital 605,000

2. D
YMD TMT
Cash 200,000 400,000
Accounts Receivable (TMT: 100,000 - 30,000) 120,000 70,000
Machinery 180,000
Computer (at agreed value) 300,000
Land 700,000
Adjusted capital 800,000 1,170,000

Adjusted capital Bonus Method

YMD (1,970,000 x 50%) 800,000 985,000
TMT (1,970,000 x 50%) 1,170,000 985,000
Total 1,970,000 1,970,000

Cash 600,000
Accounts Receivable 190,000
Machinery 180,000
Computer 300,000
Land 700,000
YMD, Capital 985,000
TMT, Capital 985,000

3. B
Sora A-chan
Cash 800,000 400,000
 Accounts Receivable (Sora: 340,000 - 20,000) 320,000 225,000
Inventory 175,000 120,000
Building 1,000,000
Mortgage loan (500,000)
Adjusted capital 1,295,000 1,245,000

A-chan Sora
Adjusted capital 1,295,000 1,245,000
Divided by: Profit and loss ratio of Sora; A-chan 40% 60%
Total 3,237,500 2,075,000
Multiply by: Profit and loss ratio of A-chan; Sora 60% 40%
Minimum capital required of A-chan; Sora 1,942,500 830,000
A-chan's adjusted capital; Sora's adjusted capital (1,245,000) 1,295,000
Additional cash investment 697,500 -

4. C
Nin Nin Jakin Jakin
Cash 1,000,000 340,000
Accounts receivable 245,000 200,000
Inventory 200,000
Building 1,070,000
Machinery 500,000
Adjusted capital 1,745,000 1,810,000

5. A
Lalion Wamy
Cash 445,000 400,000
Accounts Receivable (Wamy: 230,000 - 25,000) 340,000 205,000
Inventory 234,000
Machinery 644,000
Adjusted capital 1,019,000 1,249,000

Wamy
Adjusted capital of Lalion 1,019,000
 Divided by: Profit and loss ratio of Lalion 32%
Total 3,184,375
Multiply by: Profit and loss ratio of Wamy 68%
Minimum capital required of Wamy 2,165,375
Wamy's adjusted capital (1,249,000)
Additional cash investment 916,375

PARTNERSHIP OPERATIONS
Theory Problem Solving
1. B 1. C
2. B Aya Fubu Mio Total
3. C Salaries 150,000 90,000 120,000 360,000
4. A Remainder (800,000 - 360,000 = 440,000)
5. D (440,000 x 30%; 440,000 x 25%; 440,000 x 45%) 132,000 110,000 198,000 440,000
Total 282,000 200,000 318,000 800,000

2. D
Kon Nye Nanora Total
Salaries 50,000 80,000 70,000 200,000
Interest (Kon: 400,000 x 12%; Nye: 500,000 x 12%) 48,000 60,000 108,000
Remainder (1,000,000 - 200,000 - 108,000 = 692,000)
(692,000 x 20%; 692,000 x 50%; 692,000 x 30%) 138,400 346,000 207,600 692,000
Total 236,400 486,000 277,600 1,000,000

3. A
Chicken Turkey Duck Total
Salaries 90,000 75,000 60,000 225,000
Bonus (Duck: 500,000 x 10%) 50,000 50,000
Remainder (500,000 - 225,000 - 50,000 = 225,000)
(225,000 x 30%; 225,000 x 20%; 225,000 x 50%) 67,500 45,000 112,500 225,000
Total 157,500 120,000 222,500 500,000
 4. D
Coco Rush Alo Total
Salaries 50,000 20,000 30,000 100,000
Interest 20,000 15,000 30,000 65,000
Bonus (Rush: 900,000/1.2 x 20%) 108,000 150,000
Remainder 234,000 175,500 175,500 585,000
Total 304,000 210,500 343,500 900,000

5. A
Korone Okayu Kanata Total
Salaries 200,000 250,000 300,000 750,000
Remainder (1,200,000 - 750,000 = 450,000)
(450,000 x 20%; 450,000 x 40%; 450,000 x 40%) 90,000 180,000 180,000 450,000
Total 290,000 430,000 480,000 1,200,000

PARTNERSHIP DISSOLUTION
Theory Problem 1 Before Adjustment Purchase After
1. D Ouro 250,000.00 - (62,500.00) 187,500.00
2. A Kirin 350,000.00 - (87,500.00) 262,500.00
3. D Mei 400,000.00 - (100,000.00) 300,000.00
4. C Bae 250,000.00 250,000.00
5. D Capital After Admission 1,000,000.00 1,000,000.00

2. C
Amount paid to Chama and Ehe 200,000
Divided by: Interest purchased % by Po 10%
Adjusted capital of Chama and Ehe 2,000,000
Less: Unadjusted capital of Chama and Ehe 1,050,000
Adjustments for Chama and Ehe ONLY 950,000
Divided by: Total profit and loss ratio of Chama and Ehe 7/9
Total adjustments 1,221,429
 Capital After
Capital Before Admission Adjustment Interest Purchased
Admission
Chama 425,000 384,524 (80,952) 728,571
Guh 300,000 271,429 571,429
Ehe 625,000 565,476 (119,048) 1,071,429
Po 200,000 200,000
Total 1,350,000 1,221,429 - 2,571,429

3. B
AC CC DIFF
OLD 1,742,500 1,650,000 92,500
NEW 307,500 400,000 (92,500)
TOTAL 2,050,000 2,050,000 -

Capital After
Capital Before Admission Investment Adjustment
Admission
Inu 500,000 18,500 518,500
Neko 450,000 27,750 477,750
Kitsune 700,000 46,250 746,250
Okami 400,000 (92,500) 307,500
Total 1,650,000 400,000 - 2,050,000

4. A
Machinery 130,000
Building (120,000)
Net income 50,000
Net adjustment 60,000

Nene De Gozaru Wah

Beginning capital 700,000 800,000 600,000
Net adjustment 15,000 24,000 21,000
Bonus adjustment 185,000 (98,667) (86,333)
Cash given to Nene 900,000
Ending Capital 725,333 534,667
5. B
Accounts receivable (38,000)
Inventory 200,000
Equipment 120,000
Building (300,000)
Net adjustment (18,000)

Kuro Enen Olivia

Beginning capital 1,500,000 1,000,000 800,000
Net adjustment (-18000*32; -18000*41; -18000*27) (5,760) (7,380) (4,860)
Adjusted capital 1,494,240 992,620 795,140
Divided by: par value of shares 50 50 50
Number of shares to each partner 29,885 19,852 15,903