Dayag Chapter 3

7/23/2019 Dayag Chapter 3

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Chapter 3Problem I1.

Ben, capital 350,000 Pet, capital (50% x P700,000) 350,000

2. The total capital of BIG Entertainent Galle! reain" at P1,#$0,000. The total aontpai& '! Pet to Ben &oe" not aect the partner"hip an& Pet &oe" not 'ecoe a partnerith the a""i*nent of half of Ben+" intere"t.

Problem II1.

a. , capital----------------------- 2#,000 , capital-------------------......... 2#,000

'.1.D, capital (P72,000 x ¼)………………………………………… 18,000E, capital (P48,000 x ¼)………………………………………… 12,000

F, capital…………………………………………………. 30,000

The capital 'alance" of the partner" after the a&i""ion of ol& 'e a" follo"/

E ('oo ale) Totalapital 'efore a&i""ion-P 72,000 P #$,000 P120,000

x/ Intere"t reaine&---.. 4 4 apital after a&i""ion-.. P5#,000 P 3,000 P 30,000 P120,000

Therefore, the pro6t an& lo"" ratio of the partner" after the a&i""ion of ol& 'ea" follo"/

, capital (70% x 4)------------------ 52.50%

E, capital (30% x 4)------------------. 22.50%, capital (eialent to intere"t acire&)-------. 25.00% Total-------------------------.100.00%

'.2 '.2.1

D, capital (P72,000 x ¼)………………………………………… 18,000E, capital (P48,000 x ¼)………………………………………… 12,000

F, capital…………………………………………………. 30,000

The positive excess o P!,000 "ep"ese#ts a pe"so#al $ai# o D a#% E, co&p'te% asollos

8ont pai& (P21,00 9 P1#,#00)-------------. P3,000

:e""/ B; of intere"t acire& < (P 120,000 x =)-----------............................. 30,000Exce"" (Gain of an& E < per"onal in natre)-.------.. P ,000

The pa"t#e"ship %oes #ot "eco"% this $ai# *eca'se it as #ot *e#e+te% "o& it.

'.2.2



ssets (-oo%ill)……………………………………………….. 24,000D, capital (P24,000 x 70).……………………………........ 1!,800E, capital (P24,000 x 30).……………………………......... 7,200

>r,8ont pai& (P21,00 9 P1#,#00)-----.. P3,000 ? = P1##,000 (100%):e""/ B; of intere"t acire& <

(P 120,000 x =)-----------... 30,000 120,000 (100%)Exce""------------------.. P ,000ii&e& '! (capitali@e& at)/ Intere"t acire& =Aealation of 8""et par&-------.. P2#,000 P 2#,000 (100%)

D, capital /(P72,000 P1!,800) x ¼………………………… 22,200 E, capital /(P48,000 P7,200) x ¼…………………………… 13,800

F, capital…………………………………………………...... 3!,000


E (aont pai&) Totalapital 'efore a&i""ion- P 72,000 P #$,000 P120,000Aealation par&---. 1,0$00 7,200 2#,000apital 'alance after realation------. P $$,$00 P 55,200 P1##,000

x/ Intere"t reaine&---.. 4 4 apital after a&i""ion-.. P,00 P #1,#00 P 3,000 P1##,000

apital intere"t %.............. 25P C : %/ (3?# x 70%)-- 52.50

E (3?# x 30%)-- 22.50 (1?#)----- 25

It "hol& 'e o'"ere& that the total capital 'alance after the a&i""ion increa"e"eialent to the realation of a""et" aontin* to P2#,000. The rea"on of "cha&D"tent" i" to eali@e the capital of the ne partner to the aont pai&.

'.3 '.3.1


F, capital…………………………………………………. 30,000

The #e$ative excess o P3,!00 "ep"ese#ts a pe"so#al loss o D a#% E, co&p'te% asollos

8ont pai& ---------.-------------. P 2,#00:e""/ B; of intere"t acire& <

(P 120,000 x =)-----------............................. 30,000Exce"" (:o"" of an& E < per"onal in natre)-.------- P( 3,00)

'.3.2 The entr! to recor& the tran"action in the 'oo" follo"/



D, capital (P14,400 x 70).…………………………………….. 10,080 E, capital (P14,400 x 30).……………………………………... 4,320

ssets ……………………………………………………..... 14,400 >r,

8ont pai& ----------.----.. P 2,#00 ? = P 105,00 (100%):e""/ B; of intere"t acire& <

(P 120,000 x =)-----------... 30,000 120,000 (100%)Exce""------------------.. P( 3,00)ii&e& '!/ Intere"t acire&-------.. =Aealation of 8""et onar&..-----.. P(1#,#00) P(1#,#00) (100%)

D, capital /(P72,000 P10,080) x ¼………………………. 1,480 E, capital /(P48,000 P4,320) x ¼………………………….. 10,20

F, capital………………………………………………….. 2!,400


E (aont pai&) Totalapital 'efore a&i""ion-P 72,000 P #$,000 P120,000Aealation &onar&-- 10,0$0 #,320 1#,#00apital 'alance after realation------.. P 1,20 P #$,$0 P 105,00

x/ Intere"t reaine&---- 4 4 apital after a&i""ion-.. P#,##0 P 32,70 P 2,#00 P 105,00

apital intere"t %.............. 25P C : %/ (3?# x 70%)-- 52.50

E (3?# x 30%)-- 22.50 (1?#)----- 25

opari"on 'eteen '.3.1 an& '.3.2/Fche&le of 8ccont Balance"

et Goo&ill?8""et apital 8""et" Aealation H E Boo ;ale 8pproachBalance" 'efore a&i""ion P120,000 P 72,000 P #$,000 8&i""ion ( 1$,000) (12,000) P30,000Balance" after a&i""ion

of P 120,000 P 0 P 5#,000 P 3,000 P30,000

Aealation 8pproach

Balance" 'efore a&i""ion P120,000 P 72,000 P #$,000 Aealation P 2#,000 1,$00 7,200 8&i""ion ( 22,200) (13,$00) P3,000Balance" after a&i""ion of P120,000 P 2#,000 P ,00 P #1,#00 P3,000 epreciation?ipairentJ ( 2#,000) ( 12,00) ( 5,#00)( ,000)



Total" P120,000 P 0 P 5#,000 P 3,000 P30,000

Jne pro6t an& lo"" ratio (, 52.50%K E, 22.50%, an& , 25.00%)

The to etho&" ill !iel& the "ae re"lt" copte& a" follo"K

apital E Balance" after a&i""ion of (B; approach) P 5#,000 P 3,000 P 30,000Balance" after a&i""ion of (Aealation approach) 5#,000 3,000 30,000Gain or (lo"") thro*h "e of 'oo ale approach P 0 P 0 P 0

Problem IIIa: No Bonus or No Revaluation.

The total a*ree& capital i" eal to total a*ree& capital/ Total a*ree& capital (*ien)----------------.P #$,000:e""/ Total a*ree& capital (P2#,000 9 P12,000 9 P12,000)---. #$,000ierence-------------------------P 0

The entr! to recor& the tran"action in the 'oo" follo"/


F, capital…………………………………………………. 30,000

b: Bonus to New Partner. The total contri'te& capital (T) i" eal to total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (*ien)----------------P #$,000 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P12,000)-. #$,000 ierence------------------------..P 0

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence i"attri'ta'le to 'on" to ne partner/

L+" contri'te& capital (*ien)--------------...P 12,000 L+" a*ree& capital/ (P#$,000 x 35%)-------------. 1,$00 ierence ('on" to ne partner)-------------.P #,$00

The entr! to recor& the tran"action in the 'oo" follo"/5ash……………………………………………………………….. 12,000-, capital (P4,800 x !0)………………………………………. 2,8806, capital (P4,800 x 40)………………………………………. 1,20

, capital ……………..…………………………………. 1!,800

c: Revaluation (Goodwill) to New Partner The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "o

realation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/ Total a*ree& capital/ (P1$,000 ? 1?3)------------.P 5#,000 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P12,000)- #$,000 ierence (realation?*oo&ill)-------------.P ,000

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence ofP,000 in (a) i" attri'ta'le to realation?*oo&ill to ne partner/

L+" contri'te& capital (*ien)--------------...P 12,000 L+" a*ree& capital (*ien) ---..-------------. 1$,000



ierence (realation?*oo&ill to ne partner)------P ,000

The entr! to recor& the tran"action in the 'oo" follo"/5ash………………………………………………………………..12,000

ssets ($oo%ill)………………………………………………… !,000 , capital ……………..…………………………………. 18,000

d: Bonus to Old Partners. The total contri'te& capital (T) i" eal to total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital ("hol& eal to T"ince it i" a 'on" etho&)--------------P 0,000

:e""/ Total contri'te& capitalM(P2#,000 9 P12,000 9 (P30,000 < P,000)N------.-. 0,000

ierence------------------------..P 0

The ne partner+" contri'te& capital i" *reater than hi" a*ree& capital, the &ierence i"attri'ta'le to 'on" to ol& partner"/

L+" contri'te& capital (P30,000 < P,000)---------..P 2#,000 L+" a*ree& capital/ (P0,000 x 30%)------------... 1$,000 ierence ('on" to ol& partner")..------------..P( ,000)

The entr! to recor& the tran"action in the 'oo" follo"/Ta#$i*le asset…………………………………………………….30,000

o"t$a$e pa9a*le……………………………………. !,000 , capital ……………..…………………………………. 18,000

-, capital (P!,000 x !0)…………………………….. 3,!006, capital (P!,000 x 40)…………………………….. 2,400

e: Revaluation (Goodwill) to Old Partners. The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (*ien) ---------------... P 7,$00 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9

P $,#00, realation 9 P2$,$00)----------. 73,200 ierence (realation?*oo&ill)------..------- P 3,00

The ne partner+" contri'te& capital i" eal to the a*ree& capital, the &ierence ofP3,00 in (a) i" attri'ta'le to realation (*oo&ill) to ol& partner"/

L+" contri'te& capital------------------- P 2$,$00 L+" a*ree& capital/ (P7,$00 x 37.5%)-.----------.... 2$,$00 ierence ----------..-------------- P 0

The entrie" to recor& the tran"action in the 'oo" follo"/

E:'ip&e#t………………………………………………………… 8,400

-, capital (P8,400 x !0)…………………………….. ,0406, capital (P8,400 x 40)……………………………… 3,3!0

5ash………….…………………………………………………….28,800;the" assets………………………………………………………. 3,!00

, capital ……………..…………………………………. 28,800-, capital (P3,!00 x !0)…………………………….. 2,1!06, capital (P3,!00 x 40)……………………………… 1,440



: Bonus and Revaluation (Goodwill) to New Partner. The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (*ien)----------------P 0,000 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P12,000)- #$,000 ierence (realation?*oo&ill) -------..-----..P 12,000

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence ofP15,000 are copo"e& of realation of P12,000 in (a) a'oe an& the 'alance i" 'on" tone partner/

L+" contri'te& capital (*ien)--------------... P 12,000 L+" a*ree& capital/ (P0,000 x #5%)-------------. 27,000 ierence (total 'on" an& realation)..---------...P 15,000 :e""/ Aealation ? *oo&ill to ne partner---------. 12,000 Bon" to ne partner-------------------... P 3,000

The entr! to recor& the tran"action in the 'oo" follo"/5ash……………………………………………………………….. 12,000

ssets ($oo%ill)………………………………………………… 12,000-, capital (P3,000 x !0)………………………………………. 1,8006, capital (P3,000 x 40)………………………………………. 1,200

, capital ……………..…………………………………. 27,000 To recor& the a&i""ion of L.

!: Bonus and Revaluation to Old Partners. The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (*ien)----------------P 72,000 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P1$,000)-. 5#,000 ierence (realation?*oo&ill)-------....-----.P 1$,000

The ne partner+" contri'te& capital i" *reater than the a*ree& capital, the &ierence of P3,00 i" 'on" to ol& partner" "ince there i" alrea&! a realation(*oo&ill) a" in&icate&'! (a) a'oe.

L+" contri'te& capital (*ien).--------------.. P 1$,000 L+" a*ree& capital/ (P72,000 x 20%)------------- 1#,#00 ierence ('on" to ol& partner")------------- P( 3,00) :e""/ Aealation ? *oo&ill to ol& partner"--------- 1$,000 Total 'on" an& realation to ol& partner".--------. P 21,00

The P3,00 &ierence i" con"i&ere& a" a 'on" "ince there a" a tran"fer of capital (a"in&icate& '! the &ecrea"e in capital of the ne partner) a&e '! the ne partner to theol& partner".


ssets ($oo%ill)…………………………………………………18,000 , capital ……………..………………………………… 14,400

-, capital (P21,!00 x !0)…………………………….. 12,!06, capital (P21,!00 x 40)…………………………….. 8,!40

h: Revaluation (Goodwill) to New and Old Partners. The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (*ien)----------------P 72,000



:e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P1$,000)-. 5#,000 ierence (realation?*oo&ill ) -------..-----. P 1$,000

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence ofP1$,000 in (a) i" attri'ta'le to realation (*oo&ill) to ne partner an& ol& partner"/

L+" contri'te& capital (*ien)--------------.. P 1$,000

L+" a*ree& capital/ (P72,000 x 30%)------------... 21,00 ierence (realation?*oo&ill to ne partner)..-----.P 3,00 :e""/ Aealation ? *oo&ill copte& in (a)..-------. 1$,000 Aealation?*oo&ill to ol& partner"---.--------..P 1#,#00


ssets ($oo%ill)…………………………………………………18,000 , capital ……………..…………………………………. 21,!00

-, capital (P14,400 x !0)…………………………… 8,!406, capital (P14,400 x 40)……………………………. ,7!0

i: Bonus to Old Partners with Bonus "mount Given. The total contri'te& capital (T) i" eal to total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital ("hol& eal to T"ince it i" a 'on" etho&)--------------P 0,000

:e""/ Total contri'te& capitalM(P2#,000 9 P12,000 9 P2#,000)-----...-----.-. 0,000

ierence------------------------..P 0

The ne partner+" contri'te& capital i" *reater than hi" a*ree& capital, the &ierence i"attri'ta'le to 'on" to ol& partner"/

L+" contri'te& capital--------.. ----------P 2#,000 L+" a*ree& capital (P2#,000 < P,000).-----------... 1$,000 ierence ('on" to ol& partner")..------------.. P( ,000)


, capital ……………..…………………………………. 18,000-, capital (P!,000 x !0)…………………………….. 3,!006, capital (P!,000 x 40)…………………………….. 2,400

#: Bonus to New Partner with an Indication o Bonus$ There i" an oer"tateent of a""et aontin* to P2,#00 (P,000 < P3,00) that i"nee&e& to 'e recor&e& to copl! ith the proi"ion" of G88P reco*ni@in* oeralationof net a""et". Therefore, the contri'te& capital of partner G an& O are a" follo"/

G, capital/ P2#,000 < (P2,#00 x 0%)----------.P 22,50O, capital/ P12,000 < (P2,#00 x #0%)----------. 11,0#0

Total contri'te& capital 'efore the a&i""ion----.. P 33,00

The total contri'te& capital (T) i" eal to total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital ("hol& eal to T"ince it i" a 'on" etho&)-------------- P #0,$00

:e""/ Total contri'te& capital MP33,00 (a) 9 P7,200N.---- #0,$00 ierence------------------------..P 0




L+" contri'te& capital (*ien)--------------...P 7,200 L+" a*ree& capital/ (P#0,$00 x 30%)-------------. 12,2#0 ierence ('on" to ne partner)-------------.P 5,0#0

The entrie" to recor& the tran"action in the 'oo" follo"/-, capital (P2,400 x !0)………………………………………. 1,4406, capital (P2,400 x 40)………………………………………. !0

E:'ip&e#ts……………………………………………… 2,400

5ash……………………………………………………………….. 7,200-, capital (P,040 x !0)………………………………………. 3,0246, capital (P,040 x 40)………………………………………. 2,01!

, capital ……………..…………………………………. 12,240

%: Revaluation (Goodwill) to Old Partners with an Indication o a Revaluation(Goodwill).

There i" an n&er"tateent of a""et aontin* to P,000 (P12,00 < P,00) that i"nee&e& to 'e recor&e& (al"o een in ca"e" of oer"tateent) a" lon* a" the realation(*oo&ill) approach i" 'ein* "e&. Therefore, the contri'te& capital of partner G an& Oare a" follo"/

G, capital/ P2#,000 9 (P,000 x 0%)----------.P 27,00O, capital/ P12,000 9 (P,000 x #0%)----------.. 1#,#00

Total contri'te& capital 'efore the a&i""ion----..P #2,000

The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (P1$,000 ? = )J-..---.-------...P 72,000 :e""/ Total contri'te& capital MP#2,000 (a) 9 P1$,000N---..- 0,000 ierence (realation?*oo&ill ) -------..-----.P 12,000

JThe ol& partner+" total contri'te& capital of P#2,000 "hol& not 'e "e& a" a 'a"i"'eca"e it ill re"lt to a ne*atie realation. In ca"e" of realation an& there i"no "peci6cation a" to par& or &onar& a&D"tent", the pre"ption "hol&ala!" 'e par&. The P1$,000 a" capitali@e& '! = to &eterine the ale of thepartner"hip a" a hole.

The ne partner+" contri'te& capital i" eal to the a*ree& capital, the &ierence ofP12,000 in (a) i" attri'ta'le to realation (*oo&ill) to ol& partner"/

L+" contri'te& capital (*ien)--------------...P 1$,000 L+" a*ree& capital--------------------- 1$,000 Aealation?*oo&ill to ne partner---.--------...P 0

The entrie" to recor& the tran"action in the 'oo" follo"/;the" assets…………………………………………………….... !,000

-, capital (P!,000 x !0)…………………………….. 3,!006, capital (P!,000 x 40)…………………………….. 2,400

5ash……………………………………………………………….. 18,000 ssets ($oo%ill)………………………………………………… 12,000

, capital ……………..…………………………………. 18,000-, capital (P12,000 x !0)…………………………… 7,2006, capital (P12,000 x 40)……………………………. 4,800



l: Revaluation (Goodwill) to New Partner with Revaluation "mount Given. The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital (T, P0,000 9 P7,200, *oo&ill) ---.P 7,200 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P2#,000)- 0,000 ierence (realation?*oo&ill ) -------..-----..P 7,200

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence ofP7,200 in (a) i" attri'ta'le to realation (*oo&ill) to ne partner/

L+" contri'te& capital (*ien)--------------...P 2#,000 L+" a*ree& capital/ (P2#,000 9 P7,200)------------ 31,200 Aealation?*oo&ill to ne partner---.--------..P 7,200

The entr! to recor& the tran"action in the 'oo" follo"/

5ash……………………………………………………………….. 24,000 ssets ($oo%ill)………………………………………………… 7,200

, capital ……………..…………………………………. 31,200 To recor& the a&i""ion of L.

m: &ithdrawals Instead o Revaluation$ The total contri'te& capital (T) i" *reater than total a*ree& capital (T8), "o it "hol&hae 'een a ne*atie realation. Fince there a" an in&ication that capital 'alance""hol& eal to the pro6t an& lo"" (ol& or ne) ratio, then the &ierence "hol& 'econ"i&ere& a" ith&raal" (if it i" a po"itie realation it "hol& hae 'een a&&itionaline"tent an& if the T H T8, it "hol& hae 'een "ettleent 'eteen partner")in"tea& of ne*atie realation.

Total a*ree& capital (*ien)---------------...P #$,000 :e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P2#,000).. 0,000 ierence (ith&raal")-----------------..P 12,000


L+" contri'te& capital (*ien)--------------...P 2#,000 L+" a*ree& capital/ (P#$,000 x 50%)-------------. 2#,000 ierence-----------..-------------.P 0

The ith&raal" of P12,000 "hol& 'e attri'ta'le to the ol& partner" copte& a"follo"/

Total a*ree& capital (*ien)-----------. P #$,000 :e""/ L+" a*ree& capital (P#$,000 x 50%)------ 2#,000 Total a*ree& capital of the ol& partner"------ P 2#,000

:e""/ G+" a*ree& capital (P2#,000 x 0%)------P 1#,#00 O+" a*ree& capital (P2#,000 x #0%)------ ,00 2#,000

G+" ith&raal/ P2#,000 < P1#,#00--------- P ,00

O+" ith&raal/ P12,000 < P,00---------.. P 2,#00

The entr! to recor& the tran"action in the 'oo" follo"/5ash (P24,000 P12,000)………………………………………. 12,000-, capital…………………………………………………………. ,!006, capital………………………………………………………….. 2,400

, capital ……………..…………………………………. 24,000

n: Bonus and Revaluation (Goodwill) &hen Not 'pecicall 'tated.



n$*: Revaluation (Goodwill) or Bonus to New Partner.n$*$*: Bonus "pproach$

The total contri'te& capital (T) i" eal to the total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/ Total a*ree& capital ("hol& eal to T,

"ince it i" a 'on" etho&)--------------P 5#,000

:e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P1$,000).. 5#,000 ierence-----------..-------..-----.P 0

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence i"attri'ta'le to 'on" to ne partner/ L+" contri'te& capital (*ien).--------------...P 1$,000

L+" a*ree& capital/ (P5#,000 x #0%)------------- 21,00 ierence ('on" to ne partner)..------------..P 3,00

The entr! to recor& the tran"action in the 'oo" follo"/ 5ash………………………………………………………………..18,000

-, capital (P3,!00 x !0)……………………………………… 1,2!0 6, capital (P3,!00 x 40)………………………………………. 1,440

, capital ……………..…………………………………. 21,!00

n$*$+: Revaluation (Goodwill) "pproach$ The total contri'te& capital (T) i" le"" than the total a*ree& capital (T8), "orealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/ Total a*ree& capital/

(P2#,000 9 P12,000) ? (100% #0%)----------...P 0,000:e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P1$,000).. 5#,000

ierence (realation?*oo&ill).-------..-----.P ,000

The ne partner+" contri'te& capital i" le"" than the a*ree& capital, the &ierence of P,000 in (a) i" attri'ta'le to realation (*oo&ill) to ne partner/ L+" contri'te& capital (*ien).--------------.P 1$,000

L+" a*ree& capital/ (P0,000 x #0%)------------.. 2#,000 ierence (realation?*oo&ill to ne partner)..----...P ,000

The entr! to recor& the tran"action in the 'oo" follo"/ 5ash………………………………………………………………..18,000 ssets ($oo%ill)………………………………………………… !,000

, capital ……………..…………………………………. 24,000

,he ollowin! items should be observed:1. ,he New Prot and -oss Ratio. The capital intere"t of L i" #0%, hile hi" pro6t an&

lo"" i" 25%, "o the ne pro6t an& lo"" intere"t of the ne partner"hip i" copte& a"follo"/

G O L

apital intere"t %.............. #0P C : %/ G (0% x 75%)-- #5

O (#0% x 75%)-- 30 L --..----- 25

2. ,he Capital Balances o the New Partners. 8fter a&i""ion of partner L, the capital'alance" of the ne partner" are copte& a" follo"/

Bon" 8pproach (total a*ree& capital)



refer to 8lternatie 1 a'oe/G, capital (P2#,000 < P2,10)------------P 21,$#0O, capital (P12,000 < P1,##0)------------ 10,50

L, capital-------------------....... 21,00 Total-----------------------. P 5#,000

Aealation (*oo&ill) 8pproach (total a*ree& capital) refer to 8lternatie 2 a'oe/G, capital--------------------...P 2#,000O, capital--------------------- 12,000

L, capital (P0,000 x #0%)-------------.. 2#,000 Total-----------------------.P 0,000

Schedule of Account Balances

et Goo&ill?8""et apital 8""et" Aealation H G O

L Bon" 8pproachBalance" after a&i""ion

of L P 5#,000 P 0 P 21,$#0 P 10,50 P21,00

Aealation 8pproachBalance" after a&i""ion of L P 5#,000 P ,000 P 2#,000 P 12,000 P2#,000 epreciation?ipairentJ ( ,000) ( 2,700) ( 1,$00)( 1,500)

Total" P 5#,000 P 0 P 21,300 P 10,200 P22,500

.new prot and loss ratio (G/ 012 4/ 352/ and 6/ +12)

The to etho&" ill !iel& the "ae re"lt" copte& a" follo"K apital G O L Balance" after a&i""ion of L (Bon" approach) P 21,$#0 P10,50 P 21,00Balance" after a&i""ion of L (Aealation approach) 21,300 10,200 22,500Gain or (lo"") thro*h "e of 'on" approach P 5#0 P 30 P( 00)

n$+: Revaluation (Goodwill) or Bonus to Old Partners.n$+$*: Bonus "pproach$

The total contri'te& capital (T) i" eal to the total a*ree& capital (T8), "o norealation (*oo&ill) "hol& 'e reco*ni@e& a" follo"/

Total a*ree& capital ("hol& eal to T,"ince it i" a 'on" etho&)--------------P 5#,000

:e""/ Total contri'te& capital (P2#,000 9 P12,000 9 P1$,000).. 5#,000 ierence-----------..-------..-----.P 0

The ne partner+" contri'te& capital i" *reater than the a*ree& capital, the&ierence i" attri'ta'le to 'on" to ol& partner"/ L+" contri'te& capital (*ien).--------------...P 1$,000

L+" a*ree& capital/ (P5#,000 x 30%)------------- 1,200



'chedule o "ccount Balances

et Goo&ill?8""et apital 8""et" Aealation H G O

L

Bon" 8pproachBalance" after a&i""ionof L P 5#,000 P 0 P 25,0$0 P 12,720 P

1,200

Aealation 8pproachBalance" after a&i""ion of L P 5#,000 P ,000 P 27,00 P 1#,#00 P1$,000 epreciation?ipairentJ ( ,000) ( 2,10) ( 1,##0)( 2,#00)

Total" P 5#,000 P 0 P 25,##0 P 12,0 P15,00

.new prot and loss ratio (G/ 372 4/ +02/ and 6/ 052)

The to etho&" ill !iel& the "ae re"lt" copte& a" follo"K apital G O L Balance" after a&i""ion of L (Bon" approach) P 25,0$0 P 12,720 P 1,200Balance" after a&i""ion of L (Aealation approach) 25,##0 12,0 15,00Gain or (lo"") thro*h "e of 'on" approach P( 30) P( 2#0) P 00

Problem I81. Phoenix, apital 22,500

alla", apital 22,500

2. Phoenix, apital 1$,000 Tc"on, apital 10,000

alla", apital 2$,000

3. a"h 0,000Phoenix, apital (P0,000 P#0,000) .50 10,000

Tc"on, apital 10,000alla", apital #0,000

(P0,000 9 P50,000) 9 P0,000 H P200,000K Therefore, no *oo&ill i" to 'e reco*ni@e&.

alla", capital H P200,000 × 0.20 H P#0,000

#. Goo&ill 20,000Phoenix, apital 10,000

Tc"on, apital 10,000

P#0,000?0.20 H P200,000Goo&ill H P200,000 (P0,000 9 P50,000 9 P#0,000) H PQ20,000

a"h #0,000alla", apital #0,000



Problem 8

1. Boo ale of intere"t acire& H (P1$0,000 9 P0,000) × 1?3 H Q0,000

Bon" Retho&

a"h 0,000Roore, apital 0,000

2. Boo ale of intere"t acire& H (P1$0,000 9 P120,000) × 0.#5 H P135,000Boo ale of intere"t i" *reater than a""et" ine"te&.

Bon" Retho&

a"h 120,000Bron, apital (0.0 × P15,000) ,000

o"", apital (0.#0 × P15,000) ,000Roore, apital 135,000

The *oo&ill etho& i" not applica'le 'eca"e the partner" a*ree& to total capital intere"tof P300,000.

3. Boo ale of intere"t acire& (P1$0,000 9 P120,000) × 3

1

H P100,000Bon" etho& cannot 'e "e& 'eca"e Roore ill not accept le"" than P120,000 capital

intere"t.

Goo&ill Retho&

Total capital iplie& fro contract MP120,000?(1?3)N P30,000Rin" crrent capital 'alance 9 RooreS" ine"tent (P1$0,000 9 P120,000) 300,000Goo&ill P0,000

Goo&ill 0,000Bron, apital (0.0 × P0,000) 3,000

o"", apital (0.#0 × P0,000) 2#,000

a"h 120,000Roore, apital 120,000

#. Boo ale of intere"t acire& (P1$0,000 9 P#0,000) × = H P55,000Boo ale of intere"t acire& i" *reater than a""et" ine"te&.

Bon" Retho&

a"h #0,000Bron, apital (0.0 × P15,000) ,000

o"", apital (0.#0 × P15,000) ,000Roore, apital 55,000

5. Boo ale of intere"t acire& (P1$0,000 9 P35,000) × 0.20 H P#3,000Boo ale of intere"t acire& i" *reater than the a""et ine"te&.

Goo&ill Retho&



Total capital P225,000Rin" recor&e& ale of net a""et" 9 RooreS" ine"tent (P1$0,000 9 P35,000) 215,000

Goo&ill P10,000

a"h 35,000

Goo&ill 10,000Roore, apital #5,000

. Boo ale of intere"t acire& (P1$0,000 9 P150,000) × (1?3) H P110,000Boo ale of intere"t acire& i" le"" than a""et ine"te&.

Bon" Retho&

:an& 150,000Bron, apital (0.0 × P#0,000) 2#,000

o"", apital (0.#0 × P#0,000) 1,000Roore, apital 110,000

Goo&ill Retho&

et ale of 6r iplie& '! contract MP150,000?(1?3)N P#50,000Rin" crrent capital 9 RooreS" ine"tent (P1$0,000 9 P150,000) 330,000

Goo&ill P120,000

Goo&ill 120,000Bron, apital (0.0 × P120,000) 72,000

o"", apital (0.#0 × P120,000) #$,000

:an& 150,000Roore, apital 150,000

7. Bon" Retho&

Bron, apital (0.30 × P2,000) 27,00o"", apital (0.30 × P$$,000) 2,#00

Roore, apital 5#,000

Problems9 8I1. (a) Goo&ill etho&/ a"h---------------------- 5,000 Goo&ill-------------------- #,200

Ra"on, apital---------------- 2,520 orri", apital----------------.. 1,$0 >"ter, apital----------------.. 5,000

optation of *oo&ill/

Total capital after a&D"tent for *oo&ill, P5,000 ? .25-----------------.. P20,000 Total capital 'efore a&D"tent for *oo&ill-.. 15,$00 Goo&ill alloe& ol& partner"--------..P #,200

i"tri'tion of *oo&ill/

Ra"on/ 3?5 of P#,200-------------P 2,250 orri"/ 2?5 of P#,200-------------- 1,$0 P #,200



(')Bon" etho&/ a"h---------------------- 5,000

Ra"on, apital---------------- 30orri", apital----------------.. #20>"ter, apital----------------.. 3,50

optation of 'on"/

8ont ine"te& '! >"ter----------.. P 5,000>"ter+" intere"t, 25% of P 15,$00------..-.. 3,50Bon" alloe& ol& partner"---------- P 1,050

i"tri'tion of 'on"/Ra"on/ 3?5 of P1,050-------------. P 30orri"/ 2?5 of P1,050-------------- #20

P 1,050

(c) The 'on" etho& ill 'e preferre& '! >"ter, ho ill *ain P350. orri" ill *ain P1#0,hile Ra"on ill lo"e P#0.

>RP8AIF> OE G>>I:: IF > T> EUIFT

Goo& >ther Ra"on orri" >"ter ill 8""et" apital apital apital

hen *oo&ill etho& i" "e&-.. P#,200 P15,$00 P$,520 P,#$0 P5,500hen 'on" etho& i" "e&--- P15,$00 P,30 P5,220 P3,508&& reco*nition of *oo&ill(*ain &i"tri'te& in pro6t an& lo"" ratio, eall!)---------. P#,200 1,#00 1,#00 1,#00

P#,200 P15,$00 P$,030 P,20 P5,350Gain (lo"") thro*h "e of'on" etho&---------. (P #0) P 1#0 P350

>RP8AIF> OE G>>I:: IF >T AE8:IVE

Goo& >ther Ra"on orri" >"ter ill 8""et" apital apital apital

hen 'on" etho& i" "e&--- P15,$00 P,30 P5,220 P3,50hen *oo&ill etho& i" "e&-.. P#,200 P15,$00 P$,520 P,#$0 P5,500e&ct riteo of *oo&ill(lo"" &i"tri'ta'le eall!)---- P#,200 1,#00 1,#00 1,#00

P15,$00 P7,120 P5,0$0 P3,00Gain (lo"") thro*h "e of'on" etho&---------. (P #0) P 1#0 P350

2. (a) Goo&ill etho&/ a"h---------------------- 5,000 Goo&ill-------------------- 2,200

>"ter, apital----------------.. 7,200 optation of *oo&ill/

Total capital after a&D"tent for *oo&ill,P10,$00 ? .0-----------------.P1$,000

Total capital 'efore a&D"tent for *oo&ill-.. 15,$00Goo&ill alloe& to >"ter----------.. P 2,200

(')Bon" etho&/ a"h---------------------- 5,000



Bon" to Aeainin* Partner"-------------. P ,000

The capital 'alance" of the partner" after the retireent of W are a" follo"/:, capital (P#$,000 9 P12,000, pro6t 9 P#,2$, 'on")-----..P#,2$R, capital (P1$,000 9 P#,$00 pro6t 9 P1,71#, 'on")------.. 2#,51#

c$+: Partial Revaluation=&rite9down o 'pecic "ssets ('hare o Retirin!Partner). The entr! to recor& the tran"action in the 'oo" follo"/

<, capital…………………………………………………………. 37,200@peci+c sset…..……………………………………… !,000

5ash………………………….………………………….. 31,200

8ont pai&---------..----------- P 31,200:e""/ B; of W+" total intere"t (30%)---------....... 37,200Partial realation?rite&on of "peci6c a""et"--..- P ,000

The capital 'alance" of the partner" after the retireent of W are a" follo"/:, capital (P#$,000 9 P12,000, pro6t)----------.---P0,000R, capital (P1$,000 9 P#,$00, pro6t)-----------.-- 22,$00

c$3: ,otal Revaluation=&rite9down o "ssets (>ntire >ntit). The entrie" to recor& the tran"action in the 'oo" follo"/

<, capital (P20,000 x 30)…………………………………...... !,000=, capital (P20,000 x 0)………………………………………10,000, capital (P20,000 x 20)……………………………………. 4,000

ssets……………………………………………………. 20,000 To recor& rite&on of a""et" copte& a" follo"/

8ont pai&---------..-----------.P 31,200:e""/ B; of W+" total intere"t (30%)---------........ 37,200Partial realation?rite&on of a""et--------..P ,000J

ii&e& '! (capitali@e& at)/ Pro6t an& lo"" % of W............ 30% Total Aealation?rite&on of a""et"-.-------.P 20,000

JThe P,000 repre"ent" W+" 30% intere"t in rite&on of a""et" of P20,000. otice that theP,000 repre"ent" W+" intere"t in the lo"".

<, capital (P 37,200 A P!,000)………………………………. 31,200 5ash………………………….………………………... 31,200

The capital 'alance" of the partner" after the retireent of W are a" follo"/:, capital (P#$,000 9 P12,000, pro6t < P10,000)----------...P50,000R, capital (P1$,000 9 P#,$00, pro6t P#,000)---------.-.. 1$,$00

ssets (-oo%ill)……………………………………………….. 11,200<, capital (P11,200 x 30)…………………………….. 3,3!0

=, capital (P11,200 x 0)…………………………….. ,!00, capital (P11,200 x 20)……………………………. 2,240

To recor& total realation (*oo&ill) copte& a" follo"/ 8ont pai&---------..----------.. P #2,000:e""/ B; of W+" total intere"t (30%) P31,000 9 P1,200....... 3$,#0Partial realation (*oo&ill) to Aetirin* Partner---- P 3,30J

ii&e& '! (capitali@e& at)/ Pro6t an& lo"" % of W............. 30% Total Aealation ------------------.. 11,200



Problem 8III1. Gre!, apital P200,000 9 (P30,000 2?) 210,000

Portne!, apital (P20,000 3?#) 15,000Ao"", apital (P20,000 1?#) 5,000

a"h 230,000

2. Goo&ill (P20,000 X 2?) 0,000

Portne!, apital 30,000Gre!, apital 20,000Ao"", apital 10,000

Gre!, apital 230,000a"h 230,000

Problem I?1. (a) , apital 105,000

8, apital 21,000B, apital 1#,000

a"h 1#0,000

(') Goo&ill 35,000, apital 35,000

, apital 1#0,000a"h 1#0,000

(c) 0.5U HP35,000 U HP70,000

Goo&ill 70,0008, apital 21,000B, apital 1#,000, apital 35,000

, apital 1#0,000

a"h 1#0,000

2. The 'on" etho& i" ore o'Dectie. That i", the 'on" etho& &oe" not reire the allocation of a"'Dectie ale to *oo&ill. Fince thi" i" not an ar+" len*th tran"action, there i" no o'Dectie'a"i" to reale the 6r a" a hole.

Problem ?(1) Fince a &e'it a" a&e to 8*ler+" capital accont, a 'on" a" pai& to the retirin* partner of

P$0,000 (5?$ *oo&ill H P50,000), re"ltin* in a total pa!ent to olter of P230,000. The entr!ol& 'e/

8*ler, apital 50,000Bate", apital 30,000olter, apital 150,000

a"h 230,000

(2) n&er the partial *oo&ill approach, onl! the *oo&ill attri'te& to the retirin* partner i"recor&e&. Th", the pa!ent to olter a" P210,000 (P150,000 9 P0,000).

n&er the total Goo&ill, "ince P,000 a" cre&ite&, total *oo&ill of P220,000 (P,000?0.3) i"recor&e&. olter i" allocate& P##,000 (P220,000 0.20). Th", the pa!ent to olter a"P1#,000 (P150,000 9 P##,000).

Problem ?I*$ Partnership Boo%s Retained



E#t"ies i# the BooCs o the e 5o"po"atio# 'si#$ the Pa"t#e"ship BooCsInentorie" (P3,000 < P 30,00) . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

5,#00

Eipent (P$#,000 < P72,000) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

12,000

Goo&ill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

12,000

8lloance for o'tfl 8ccont" (P1,200 <P720) . . . . . . . . . . . .

#$0

8cclate& epreciation of Eipent (P3,00 <P31,200). .

5,#00

8ccre& expen"e" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

1,320

88, apital (P22,200 x 0.$0) . . . . . . . . . . . . . . . . . . . . . . . . .. . .

17,70

BB, apital (P22,200 x 0.20) . . . . . . . . . . . . . . . . . . . . . . . . .. . . .

#,##0

To a%'st assets a#% lia*ilities to a$"ee% a&o'#ts a#% to %ivi%e #et$ai# o P22,200 *etee# pa"t#e"s i# 41 "atio

88, apital (P57,5$$ 9 P17,70) . . . . . . . . . . . . . . . . . . . . . . . .. . . .

75,3#$

BB, apital (P1,212 9 P#,##0) . . . . . . . . . . . . . . . . . . . . . . . . .. . . .

23,52

oon "toc (P10 par x ,000 "hare") . . . . . . . . . . . . . . .. . . . .

0,000

Pai&in capital in exce"" of par M(P11 < P10) x ,000 "hare"N. . . .

,000

To "eco"% %ist"i*'tio# o co&&o# stocC o < 5o"po"atio# to pa"t#e"sG

(P7,88 P17,7!0) > P11 pe" sha"e H !,80 sha"es BB (P1,212 P4,440) > P11pe" sha"e H 2,10 sha"es Total sha"es................................................ ,000 sha"es

+$ New Boo%s Opened or the CorporationE#t"ies i# the BooCs o the Pa"t#e"ship

Inentorie" (P3,000 < P 30,00) . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

5,#00

Eipent (P$#,000 < P72,000) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

12,000

Goo&ill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

12,000

8lloance for o'tfl 8ccont" (P1,200 <P720) . . . . . . . . . . . .

#$0

8cclate& epreciation of Eipent (P3,00 <P31,200). .

5,#00

8ccre& expen"e" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

1,320

88, apital (P22,200 x 0.$0) . . . . . . . . . . . . . . . . . . . . . . . . .. . .

17,70

BB, apital (P22,200 x 0.20) . . . . . . . . . . . . . . . . . . . . . . . . .. . . .

#,##0

To a%'st assets a#% lia*ilities to a$"ee% a&o'#ts a#% to %ivi%e #et$ai# o P22,200 *etee# pa"t#e"s i# 41 "atio

Aeceia'le fro 8CB orporation (P7,$00 9P22,200) . . . . . . . . . .

,000

8ccont" Pa!a'le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

#2,000

8ccre&expen"e" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,320



8lloance for o'tfl 8ccont" . . . . . . . . . . . . . . . . . . . . . . . .. . . .

1,200

8cclate& epreciation of Eipent . . . . . . . . . . . . . . . . . .. . .

3,00

a"h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

1#,#00

8ccont"

Aeceia'le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,720

Inentorie" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .

3,000

Eipent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

$#,000

Goo&ill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

12,000

To "eco"% t"a#se" o assets a#% lia*ilities to B 5o"po"atio#.

oon Ftoc of 8 C B orporation (,000 "hare" x P11) . . . .. . .

,000

Aeceia'le fro 8 C B orporation . . . . . . . . . . . . . . . . . . .. . . .

,000

To "eco"% "eceipt o ,000 sha"es o P10 pa" co&&o# stocCval'e% at P11 a sha"e i# pa9&e#t o" #et assets t"a#se""e%

to B 5o"po"atio#.

88, apital (P57,5$$ 9 P17,70) . . . . . . . . . . . . . . . . . . . . . . . .. . . .

75,3#$

BB, apital (P1,212 9 P#,##0) . . . . . . . . . . . . . . . . . . . . . . . . .. . . .

23,52

oon Ftoc of L C Worporation . . . . . . . . . . . . . . . . . . . . . . .

,000

To "eco"% %ist"i*'tio# o co&&o# stocC o < 5o"po"atio# to pa"t#e"sG

(P7,88 P17,7!0) > P11 pe" sha"e H !,80 sha"es BB (P1,212 P4,440) > P11pe" sha"e H 2,10 sha"es Total sha"es................................................ ,000 sha"es

In the "ccountin! Records o the Corporation:E#t"ies i# the BooCs o the e 5o"po"atio#a"h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

1#,#00

8ccont"Aeceia'le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,720

Inentorie" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

3,000

Eipent (P$#,000 P3,00). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

#7,#00

Goo&ill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

12,000

8lloance for o'tfl8ccont" . . . . . . . . . . . . . . . . . . . . . . . .

1,200

8ccont"Pa!a'le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

#2,000

8ccre& Expen"e" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

1,320

Pa!a'le to 8 C BPartner"hip . . . . . . . . . . . . . . . . . . . . . .............

,000

To "eco"% ac:'isitio# o assets a#% lia*ilities "o& B Pa"t#e"ship.

Pa!a'le to 8 C B Partner"hip . . . . . . . . . . . . . . . . . . . . . . . . . ,000



oon "toc, P10 par (,000 x P10) . . . . . . . . . . . . . . . .. . . . .

0,000

Pai&In apital in Exce"" ofPar . . . . . . . . . . . . . . . . . . . . . . . . . .

,000

To "eco"% iss'a#ce o ,000 sha"es o co&&o# stocC val'e%at P11 a sha"e i# pa9&e#t o" #et assets o BPa"t#e"ship.

Problem ?IIa"h $,700

Tra&e 8ccont" Aeceia'le 13,250Inentorie" 2$,000Eipent 35,000

8lloance for o'tfl 8ccont" $00ote" Pa!a'le 10,000

Tra&e 8ccont" Pa!a'le ,$00Pa!a'le to Fa&e an& Tipp #,350

To recor& aci"ition of net a""et" fro Fa&e C Tipp ::P.

Pa!a'le to Fa&e an& Tipp #,350

oon Ftoc, P1 par 10,000Pai&in apital Exce"" of Par 5#,350 To recor& i""ance of 10,000 "hare" of coon "toc toFa&e an& Tipp.

Problem ?II1. a"h 20,000

Inentor! 15,000Eipent 7,000

Fno, apital 102,000

a"h 50,000:an& 120,000

Rort*a*e Pa!a'le #0,000aite, apital 130,000

2. Fno, apital 7,$0aite, apital 1,320

Incoe Far! 2#,000

Fno aite Totalet lo"" to 'e allocate&Intere"t on capital ine"tent

P102,000 × 10% P10,200

P130,000 × 10% P13,000 P23,200Falarie" to partner" 15,000 20,000 35,000

5$,2008llocation #0/0 (32,$$0 ) (#,320) ($2,200)et lo"" allocate& to partner" P(7,$0) P(1,320) P(2#,000)

3. a"h 70,000Fno, apital (P13,#00 × #0%) 5,30

aite, apital (P13,#00 × 0%) $,0#0 Yon*, apital $3,#00



apital intere"t of Fno (P102,000 P7,$0) P#,320apital intere"t of aite (P130,000 P1,320) 113,$0Ine"tent of Yon* 70,000

Total capital intere"t in ne partner"hip 27$,000Percenta*e acire& '! Yon* 30%apital intere"t of Yon* $3,#00

Ine"tent '! Yon* (70,000 )Bon" to Yon* P13,#00

#. Incoe Far! 150,000Fno, apital (P150,000 × 20%) 30,000

aite, apital (P150,000 × 50%) 75,000

Yon*, apital (P150,000 × 30%) #5,000

5. Fno, apitalJ 11$,0aite, apital (P1$,0 × 50?$0) 11,$50

Yon*, apital (P1$,0 × 30?$0) 7,110a"h #0,000ote Pa!a'le 0,000

JP102,000 P7,$0 P5,30 9 P30,000 H P11$,0

Problem ?I8

@ultiple Choice Problems1. c

#ote$ 8 partner"hip i" not &i""ole& hen a partner a""i*n" hi" or her intere"t in the partner"hipto a thir& part! 'eca"e "ch an a""i*nent &oe" not in it"elf chan*e the relation" aon*partner". Fch a""i*nent onl! entitle" the a""i*nee to receie the a""i*nin* intere"t partner+"intere"t in ftre partner"hip pro6t" an& in partner"hip a""et" in the eent of lii&ation. Thea""i*nee &oe" not 'ecoe a partner, hoeer, an& &oe" not o'tain the ri*ht to "hare inana*eent of the partner"hip. If the a""i*nee &oe" not 'ecoe a partner, the onl! chan*ereire& on the partner"hip 'oo" i" for tran"fer of the capital intere"t of the a""i*nor partner to

the a""i*nee. The a""i*nent '! 8 to of hi" 50% intere"t in the BIG Entertainent opan! i"recor&e& are follo"/

8, apital (P1$,000 x 1?#)................................................................. #2,000, apital.............................................................................. #2,000

The aont of the capital tran"fer i" eal to the recor&e& aont of 8+" capital at the tie of thea""i*nent, an& it i" in&epen&ent of the con"i&eration receie& '! 8 for hi" 1?# intere"t. If therecor&e& aont of 8+" i" P#2,000, then the aont of the tran"fer entr! i" P#2,000, re*ar&le"" ofhether pa! 8 P#2,000 or "oe aont. Therefore, the capital of the partner"hip after thea""i*nent of intere"t reain" the "ae at P#$0,000.

2. c8ont pai&------------------------------.P 200,000

:e""/ Boo ale of intere"t acire&/ (P100,000 9 P200,000 9 P300,000) x 25%..150,000

Exce"" < partial *oo&ill-------------------------P 50,000ii&e& '!/ capitali@ation rate 'a"e& on intere"t acire&-------....... 25%Goo&ill or realation of a""et par&-----------------.P 200,000

Lethro/ MP200,000 9 (P200,000 x 30%)N x 75% H P15,000

3. '



8*ree& capital of W P 0,000a"h ine"tent '! W 50,000Bon" to W P 10,000

Therefore, EH P70,000 < (P10,000 x 70%) H P3,000 H P0,000 < (P10,000 x 30%) H P57,000

LH P50,000

. ' Total capital i" P200,000 (P110,000 9 P#0,000 9 P50,000) after the ne ine"tent.8" Wan"a"S" portion i" to 'e 30 percent, the capital 'alance ol& 'e P0,000(P200,000 30%). Fince onl! P50,000 a" pai&, a 'on" of P10,000 "t 'e taenfro the to ori*inal partner" 'a"e& on their pro6t an& lo"" ratio/ Bolcar <P7,000(70%) an& ear! < P3,000 (30%). The re&ction &rop" ear!S" capital 'alance froP#0,000 to P37,000.

10. & Total of ol& partner"S capital P $0,000Ine"tent '! ne partner 15,000

Total of ne partner"hip capital P 5,000apital aont cre&ite& to Lohn"on (P5,000 x .20) P 1,000

11. ':: ine"t" P#0,000 an& total capital "peci6e& a" P150,000/Ine"tent in partner"hip P #0,000e partnerS" proportionate 'oo ale M(P110,000 9 P#0,000) x 1?3N (50,000)ierence (ine"tent \ 'oo ale) P (10,000)

Retho&/ Bon" or *oo&ill to ne partner

Fpeci6e& total re"ltin* capital P 150,000 Total net a""et" not incl&in* *oo&ill (P110,000 9 P#0,000) (150,000)E"tiate& *oo&ill P 0

Therefore, 'on" of P10,000 to ne partnerBori"S capital H P5#,000 H P0,000 (P10,000 x ?10)

12. a < ] preferable accounting method% refers to bonus method Total a*ree& capital H Total contri'te& capital (n&er the 'on" etho&) (P70,000 9 P30,000 9 P#0,000).......................................................................... P

1#0,000Rltiplie& '!/ intere"t acire& '! ne partner..............................................20%apital of ne partner hapan...................................................................... P2$,000

:e""/ Ine"tent '! hapan.............................................................................#0,000 Bon" to ol& partner" to 'e allocate& eall! to ol& partner" <

8&a" an& B!e......................................................................................... P12,000

13. c MP120,000 (P170,000 9 P20,000 9 P120,000)(.25)N

1#. c



Fcott ine"t" P3,000 for a 1?5 intere"t/Ine"tent in partner"hip P 3,000e partnerS" proportionate 'oo ale M(P120,000 9 P3,000) x .20N (31,200)ierence (ine"tent ̂ 'oo ale) P #,$00

Retho&/ Goo&ill to prior partner" 1?5 e"tiate& total re"ltin* capital P 3,000E"tiate& total re"ltin* capital

(P3,000 ? .20) P 1$0,000

E"tiate& total re"ltin* capital P 1$0,000 Total net a""et" not incl&in* *oo&ill

(P120,000 9 P3,000) (15,000) E"tiate& *oo&ill?a&D"tent to prior partner" P 2#,000(&se the same procedure in #os' and ")

15. ' Total capital i" P270,000 (P120,000 9 P0,000 9 P0,000) after the ne ine"tent.Ooeer, the iplie& ale of the '"ine"" 'a"e& on the ne ine"tent i" P300,000(P0,000?20%). Th", *oo&ill of P30,000 "t 'e reco*ni@e& ith the o"ettin*allocation to the ori*inal partner" 'a"e& on their pro6t an& lo"" ratio/ Bi"hop <P1$,000 (0%) an& otton P12,000 (#0%). The increa"e rai"e" ottonS" capital froP0,000 to P102,000.

1. c Total a*ree& capitalJ P120,000 ?0% ............................................. P300,000Rltiplie& '!/ apital intere"t of Lone" (ne partner)---...... 0%8*ree& capital of A.............................................................................P1$0,000

ote/ The ine"tent of i" "e& a" the 'a"i" to &eterine total a*ree&capital, otheri"e "in* the capital 'alance of ill lea& to a ]ne*atie_*oo&ill or realation &onar&.

17. c Total a*ree& capitalJ (P250,000?20%)....................................... P 1,250,000:e""/ Total contri'te& capital of A an& F/

(P500,000 9 P#00,000 9 P#0,000) 9 P250,000................. 1,10,000Goo&ill or realation to ol& partner"................................... P 0,000

Aile!/ P500,000 9 (P#0,000 x 0%) 9 (P0,000 x 0%) H P50,000

or,

1$.

c

ontri'te&

apital

8*ree&apital Goo&ill

Aile! MP500,000 9 (P#0,000 x0%)N

P 52#,000 P *+"""" P 3,0000%

Fith MP#00,000 9 (P#0,000 x#0%)N

#1,000 2#,000#0%

P #0,000 P1,000,000 P 0,000 T!ler 250,000 250,000 ?

20% 0

Total P1,10,000

P1,250,000100%

P 0,000



(P1#0,000 9 P#0,000 9 P50,000)......................................... 230,000Goo&ill?realation...........................------..----..P 10,000ote/ "ince the pro'le in&icate" that there i" *oo&ill?realation of a""et&onar&, total a*ree& capital "hol& 'e hi*her copare& to total contri'te&capital (to achiee thi" o'Dectie the capital of ol& partner" "hol& 'e "e& a" a'a"i")

a"h 50,000Goo&ill?a""et" 10,000ai&, capital (1?# x P2#0,000) 0,000

25. ' Total a*ree& capital (P#0,000) ? 1?5............................................P200,000:e""/ Total contri'te& capital

(P1#0,000 9 P#0,000 9 P#0,000)......................................... 220,000Aealation of a""et ? inentor! &ecrea"e&--..----....P( 20,000)ote/ "ince the pro'le in&icate" that there i" realation of a""et &onar&, totala*ree& capital "hol& 'e loer copare& to total contri'te& capital.

2. ' < refer to o. 25 for coptation8llen/ P1#0,000 < (P20,000 x 3?#) H P125,000

aniel/ P#0,000 < (P20,000 x 1?#) H P35,000

27. &8ont pai& (P3#,000 9 P10,000) P ##,000:e""/ Boo ale of 8llen an& aniel (1?5) x P1$0,000 ) 3,000Partial *oo&ill?realation a&D"tent P $,000apitali@e& at 1?5Aealation of lan& P #0,000

2$. a.8llen/ MP1#0,000 9 (P#0,000 x 3?#)N x #?5 H P13,000aniel/ MP#0,000 9 (P#0,000 x 1?#)N x #?5 H P#0,000

2. ' Total a*ree& capital (*ien)........................................................P220,000:e""/ Total contri'te& capital

(P1#0,000 9 P#0,000 9 P#0,000)......................................... 220,000ierence..............................................------..----..P 0ote @i#ce total a$"ee% a#% total co#t"i*'te% a"e the sa&e, the"eo"e is #o$oo%ill o" "eval'atio#.

Total 8*ree& apital P220,000Rltiplie& '!/ Intere"t acire& '! ai& 1?58*ree& capital of ai& P ##,000a"h ine"tent '! ai& #0,000Bon" to ai& P #,000

a"h #0,0008llen (P#,000 x 3?#) 3,000aniel (P#,000 x 1?#) 1,000ai& ##,000

30. & < refer to o. 28llen H P1#0,000 < (P10,000 x 3?#) H P137,000aniel H P#0,000 < (P10,000 x 1?#) H P3,000



#. c:, apital an& R, apital are each QP#,000 if :S" *oo&ill i" reco*ni@e&. Total capital i"P5$$,000, an& total lia'ilitie" an& capital aont to P1,12$,000.

#7. & (1) Goo&ill (realation) etho&/

8ont pai& P 3,000:e""/ Boo ale of intere"t acire& (P100,000 x 30%)) 30,000Partial *oo&ill?realation a&D"tent P ,000apitali@e& at 30%

Goo&ill?realation P 20,000

Therefore, the capital 'alance" after the a&i""ion of >>/ 8&a"/ MP0,000 9 (P20,000 x 0%)N x 70%---------P 72,000

Bron/ MP#0,000 9 (P20,000 x #0%)N x 70%...--------.. #$,000 all.............................................--------------. 3,000

Total capital after a&i""ion--------------.. .P15,000

(2) If Boo (or 'on") etho& i" "e&, the capital 'alance" ol& 'e/ 8&a"...............................................................--------P 0,000

Bron..............................................................--------.. #0,000 all/ (P0,000 9 P#0,000) x 30%-------------. .. 30,000

Total capital after a&i""ion--------------.. .P130,000

or prpo"e" of coparin* 'on" an& *oo&ill, there are to alternatie" pre"ente&/8lternatie 1/ If *oo&ill i" fon& to exi"t/

8&a" Bron all Goo&ill Retho& i" "e&-------. P72,000 P#$,000 P3,000 B;?Bon" Retho& i" "e&------- P0,000 P#0,000 P30,000 8&&/ Goo&ill J--................................... $,#00 5,00 ,000

P$,#00 P#5,00 P3,000 (Gain) lo"" < B;?'on" etho&----. P 3,00 P 2,#00 P 0

8&a"/ 70% x ?10 H #2%Bron/ 70% x #?10 H 2$%all 30%

8lternatie 2/ If *oo&ill i" not reali@e& an& ritteno a" a lo""/8&a" Bron all

Goo&ill Retho& i" "e&-------. P 72,000 P#$,000 P3,000 :e""/ riteo of *oo&ill J------. $,#00 5,00 ,000

P3,00 P#2,#00 P30,000 B;?Bon" Retho& i" "e&------- P0,000 P#0,000 P30,000 (Gain) lo"" < 'on" etho&------. P 3,00 P 2,#00 P 0

#ote$ The 'on" etho& a&here" to the hi"torical co"t concept an& it i" often "e& in accontin*practice. It i" o'Dectie that i" e"ta'li"he" total capital of the ne partner"hip at an aont 'a"e& onactal con"i&eration receie& fro the ne partner. The 'on" etho& in&irectl! acnole&*e" theexi"tence of *oo&ill '! *iin* a 'on" to either ol& or ne partner".

The *oo&ill etho& re"lt" in the reco*nition of an a""et iplie& '! a tran"action rather thanreco*ni@in* an a""et actall! prcha"e&. Oi"toricall!, *oo&ill ha" 'een reco*ni@e& onl! henprcha"e& "o that a ore o'Dectie ea"re of it" ale i" e"ta'li"he&. Therefore, opponent" of the*oo&ill etho& conten& that *oo&ill i" not &eterine& o'Dectiel! an& other factor" a! haein`ence& the aont of ine"tent reire& fro the ne partner".



8ltho*h either etho& can 'e "e& in achiein* the reire& intere"t for the ne partner, the toetho&" oer the "ae ltiate re"lt" onl!/

1. hen the incoin* partner+" percenta*e "hare of pro6t an& lo"" an& percenta*e intere"t ina""et" pon a&i""ion are eal, an&

2. hen the forer partner" contine to "hare pro6t" an& lo""e" 'eteen the"ele" in theori*inal ratio.

If the"e con&ition" are not fll! et, hoeer, re"lt" ill 'e &ierent.

#$. & < refer to o. #7 for ote. (1) Goo&ill etho&/ "in* the capital 'alance of ne partner a" a 'a"i" of coptin*

total a*ree& capital,/

Total a*ree& capital (P5,000?25%)--------------. P20,000 :e""/ Total contri'te& capital (P,000?P#,$009P5,000)----- 15,$00 Goo&ill to ol& partner"-------------------. P #,200

Therefore, the capital 'alance" after the a&i""ion of >>/ RR/ MP,0009(P#,200x3?5)N-------------------. P $,520

/ MP#,$009(P#,200x2?5)N-------------------.. ,#$0 >>------------------------------. 5,000 Total a*ree& capital---------------------- P20,000

(2) If 'on" etho& i" "e&, the capital 'alance" ol& 'e/ Total a*ree& capital (P,0009P#,$009P5,000)----------.......... P 15,$00

Rltiplie& '!/ >>+" capital intere"t----------------..... 25% 8*ree& capital to 'e cre&ite& to >>---------------... P 3,50 ontri'te&?Ine"te& capital of >>--------------.......... 5,000

Bon" to RR an& (ol& partner)---------------......... P 1,050

The 'on" ol& 'e a&&e& to RR an& /

RR/ MP0,0009(1,050,000x3?5)N-----------------. P .30 / MP#,$009(P1,050x2?5)N-------------------.. 5,220 >>------------------------------ 3,50 Total a*ree& capital---------------------.. P 15,$00

or prpo"e" of coparin* 'on" an& *oo&ill, there are to alternatie" pre"ente&/8lternatie 1/ If *oo&ill i" fon& to exi"t/

RR >> Goo&ill Retho& i" "e&-------. P$,520 P,#$0 P5,000 Bon" Retho& i" "e&--------... P,30 P5,220 P3,50 8&&/ Goo&ill (allocate& eall!)--.. 1,#00 1,#00 1,#00

P$,030 P,20 P5,350 (Gain) lo"" < 'on" etho&------. P #0 P (1#0) P 350 (&)

8lternatie 2/ If *oo&ill i" not reali@e& an& ritteno a" a lo""/

RR >> Goo&ill Retho& i" "e&-------. P$,520 P,#$0 P5,000 :e""/ riteo of *oo&ill

(allocate& eall!)-------. 1,#00 1,#00 1,#00P7,120 P5,0$0 P3,00

Bon" Retho& i" "e&--------... P,30 P5,220 P3,50



(Gain) lo"" < 'on" etho&------. P #0 P (1#0) P 350 (&)

#. a < refer to o. #7 for ote.Goo&ill etho&/ "in* the capital 'alance of ne partner a" a 'a"i" of coptin* totala*ree& capital.

Total a*ree& capital (P500,000?25%)--------------. P2,000,000 :e""/ Total contri'te& capital (P00,000?P#$0,0009P500,000)--.. 1,5$0,000 Goo&ill to ol& partner"-------------------... P #20,000

Therefore, the capital 'alance" after the a&i""ion of / 88/ MP00,0009(P#20,000x3?5)N----------------- P $52,000 (&) BB/ MP#$0,0009(P#20,000x2?5)N-----------------. #$,000 ------------------------------ 500,000

Total a*ree& capital----------------------.. P 2,000,000

Bon" Retho&/ Total a*ree& capital (P00,0009P#$0,0009P500,000)------... P 1,5$0,000 Rltipl! '!/ +" capital intere"t---------------- 25%

8*ree& capital to 'e cre&ite& to -------------.. P 35,000 ontri'te&?Ine"te& capital of --------------. 500,000

Bon" to 88 an& BB (ol& partner")---------------. P 105,000

The 'on" ol& 'e a&&e& to 88 an& BB/ 88/ MP00,0009(1,050,000x3?5)N-----------------. P 3,000 BB/ MP#$0,0009(P105,000x2?5)N------------------ 522,000 ------------------------------. 35,000 Total a*ree& capital---------------------- P 1,5$0,000

or prpo"e" of coparin* 'on" an& *oo&ill, a""e that *oo&ill i" not reali@e& an& it"hol& 'e ritteno a" a lo""/

88 BB Goo&ill Retho& i" "e&-------. P$52,000 P#$,000 P500,000 8&&/ Goo&ill (allocate& eall!)--.. 1#0,000 1#0,000 1#0,000

P712,000 P50$,000 P30,000 Bon" Retho& i" "e&--------... P3,000 P522,000 P35,000 (Gain) lo"" < 'on" etho&------. P #,000 P (1#,000) P 35,000

50. ' Total Ao! Gil apital, 'efore a&D"tent------- P30,000 P#,$00 P21#,200 :e""/ et a&D"tentJ---------.. 35,#00 11,$00 23,00 apital, after a&D"tent-------.. P273,00 P$3,000 P10,00 :e""/ Portion coere& '! coon "toc, par P10 (720 "hare to each partner).. 1#,#00 7,200 7,200Portion to 'e coere& '! preferre& "toc,

par P100-------------..... P25,200 P75,$00 P1$3,#00

Fhare" to 'e i""e&/Preferre& "toc---------. 2,52 75$ 1,$3#oon "toc--------- 1,##0 720 720

J;, P#0,000 9 P$,000 9 P1$0,00 < B;, P0,000 9 0,000 9 P17#,000.

51. &air ale of the a""et" (P200,000 9 P2#,000)-----------. P22#,000



:e""/ Total lia'ilitie"-----------------------. #0,000air ale of et 8""et"--------------------- P1$#,000:e""/ oon "toc at P1 par (10,000 "hare" x 2 x 1 par)----- 20,0008&&itional pai&in capital------------------- P1#,000

52. '

na&D"te& capital 'alance" (P1#0,000 9 P120,000)-------- P20,0008&& (&e&ct)/ a&D"tent"/8lloance" for &o'tfl accont"------------ (10000)Aealation of inentor! (P10,000 P1#0,000)------... 20,0008&&itional &epreciation-----------------. (3,000)

8&D"te& capital 'alance" eialent to the total "hare" i""e&--P27,000

53. cna&D"te& a""et" (P10,500 9 P15,00 9 P#2,000 9 P0,000)-----. P12$,#008&& (&e&ct)/ a&D"tent"/

8lloance" for &o'tfl accont"------------ ( 1,200)Fhortter prepa!ent"............................................................... $00Aealation of inentor! (P#$,000 < P#2,000)...------... ,000Aealation of eipent (P72,000 < P0,000)------... 12,000

8&D"te& a""et 'alance............................................................................. P1#,0005#. c

8&D"te& a""et 'alance............................................................................. P1#,000:e""/ :ia'ilitie" (P1,#00 9 P750).................................................................. 17,1508&D"te& net a""et"..................................................................................... P12$,$50:e""/ oon "toc, P5 par x 10,000 "hare".....................-----... 50,0008&&itional pai&in capital-------------------- P 7$,$50

Aui<9III1. a2. &3. a#. '5. c. &7. c$. a. &

Problems1. P1,000

2. PP ine"t" P17,000K no *oo&ill?realation recor&e&/Ine"tent in partner"hip P 17,000e partnerS" proportionate 'oo ale M(P0,000 9 P17,000) x 1?5N (15,#00)ierence (ine"tent ̂ 'oo ale) P 1,00

Retho&/ Bon" to prior?ol& partner" PPS" capital cre&it H P77,000 x 1?5 H P15,#00

3. Re""alina, P21,000K Aol", P1##,000 an& la&i", P0,000 Total capital i" P#50,000 (P210,000 9 P1#0,000 9 P100,000) after the ne ine"tent.8" la&i"S" portion i" to 'e 20 percent, the ne capital 'alance ol& 'e P0,000



(P#50,000 20%). Fince P100,000 a" pai&, a 'on" of P10,000 i" 'ein* *ien to theto ori*inal partner" 'a"e& on their pro6t an& lo"" ratio/ Re""alina < P,000 (0%) an&Aol" < P#,000 (#0%). The increa"e rai"e" Re""alinaS" capital 'alance fro P210,000to P21,000 an& Aol"S" capital 'alance fro P1#0,000 to P1##,000.

#. P107,500 H M(P70,000 9 P120,000 9 P0,000 9 P150,000)?.$0N(.20)

5. P337,500 H P250,000 9 (P125,000 x .70). P121,250 H MP120,000 (P170,000 9 P20,000 9 P120,000)(.25)N(.70)

7. 8'ele, P300,000K Bole, P#$0,000K ann, P#20,000

$. Bron, P15,000K Green, P,000K Ae&, P#5,000

. Fhre, P15,000K iona, P123,750K Rn, P5,250

10. Total partner"hip net a""et" can lo*icall! 'e reale& to P1,0$0,000 on the 'a"i" of theprice pai& '! Rar! 8nn.

11. P1$0,000

12. et a""et" of the partner"hip ill increa"e '! P10,000, incl&in* Profe""or+" intere"t.

13. P120,000

1#. '15. c (P150,000 9 P200,000 9 P120,000)(.20) H P#,0001. P130,000

(P150,000 9 P200,000 9 P120,000)(.20) H P#,000, *oo&ill to exi"tin* partner"P120,000 9 P0 H .2(P150,000 9 Q200,000 9 P120,000 9 *oo&ill)P120,000 H P#,000 9 .2 *oo&illP2,000 H .2 *oo&illGoo&ill H P130,000

17. '

(P250,000 9 P300,000 9 P225,000)(.25) H P13,7501$. P125,000

(P250,000 9 P300,000 9 P225,000)(.25) H P13,750, *oo&ill to exi"tin* partner"P225,000 9 P0 H .25 (P250,000 9 P300,000 9 P225,000 9 *oo&ill)P225,000 H P13,750 9 .25 *oo&illP31,250 H .25 *oo&illGoo&ill H P125,000

1. P1#5,000 rai* receie" an a&&itional P10,000. Fince rai* i" a""i*ne& 20 percent of all pro6t"

an& lo""e", thi" allocation in&icate" total *oo&ill of P50,000.

20% of Goo&ill H P10,000.20 G H P10,000

G H P10,000?.20G H P50,000

Rontana i" a""i*ne& 30% of all pro6t" an& lo""e" an& ol&, therefore, recor& P15,000 of thi" *oo&ill, an entr! that rai"e" thi" partnerS" capital 'alance fro P130,000 toP1#5,000.

20. a < M(P$0,000 − P0,000) ÷ 3 9 P,7N21. F"an+" capital accont 'alance cannot 'e &eterine& fro the inforation *ien



22. P##5,000 H P$0,000 9 P110,000 9 P55,000 9 P200,00023. P2#,000 H (P250,000 P210,000)(#5?75)2#. P13,000 H P10,000 (P250,000 210,000)(#5?75)25. P172,500 H P150,000 9 (P75,000 x .3)2. P257,250 H P135,000 9 (P75,000 x .25) 9 MP150,000 9 (P75,000 x .30)N(.0)27. onal&, P55,000K To&&, P0,000

8nne receie" an a&&itional P30,000 a'oe her capital 'alance. Fince "he i" a""i*ne&#0 percent of all pro6t" an& lo""e", thi" extra allocation in&icate" total *oo&ill ofP75,000, hich "t 'e "plit aon* all partner". #0% of Goo&ill H P30,000

8ont pai& P $0,000:e""/ Boo ale of 8nne (#0%) 50,000Partial *oo&ill?realation a&D"tent P 30,000apitali@e& at #0%Goo&ill?realation P 75,000

Goo&ill?a""et" 75,000onal& (20%) 15,000

8nne (#0%) 30,000 To&& (#0%) 30,000

8nne (P50,000 9 P30,000) $0,000a"h $0,000

onal&/ P#0,000 9 P15,000 H P55,000 To&&/ PP30,000 9 P30,000 H P0,000

2$. onal&, P30,000K To&&, P10,000 The P30,000 'on" i" &e&cte& fro the reainin* partner" accor&in* to their relatiepro6t an& lo"" ratio. onal& H 20% an& To&& H #0% hich i" a 1?3, 2?3 "plit.

8nne 50,000onal& (P30,000 x 2?) 10,000

To&& (P30,000 x #?) 20,000a"h $0,000

Therefore/ onal&/ P#0,000 < P10,000 H P30,000K To&&/ P30,000 < P20,000 H P10,000

2. P#0,000 refer to o. 2$ (P30,000 9 P10,000 H P#0,000)

30. Prefer 'on" etho& &e to VV+" *ain of P35,000Goo&ill etho&/ "in* the capital of ne partner a" a 'a"i" for coptin* total a*ree&capital. Total a*ree& capital (P500,000 X 25%) P2,000,000:e""/ Total contri'te& capital (P00,000 9 P#$0,000 9 P500,000) 1,5$0,000Goo&ill to ol& partner" P #20,000

Therefore, the capital 'alance" after a&i""ion of VV/

UU/ MP00,000 9 (P#20,000 x 3?5)N P$52,000 YY/ MP#$0,000 9 (P#20,000 x 2?5)N #$,000VV/ 500,000

Total a*ree& capital P2,000,000

Bon" Retho&/ Total a*ree& capital (P00,000 9 P#$0,000)( P500,000) P 1,5$0,000Rltiplie& '!K VV+" capital intere"t 25%8*ree& capital to 'e cre&ite& to VV P 35,000



YY/ MP#$0,000 9 (P#20,000 x 2?5)N #$,000VV/ 500,000

Total a*ree& capital P2,000,000

Bon" Retho&/ Total a*ree& capital (P00,000 9 P#$0,000)( P500,000) P 1,5$0,000

Rltiplie& '!K VV+" capital intere"t 25%8*ree& capital to 'e cre&ite& to VV P 35,000ontri'te& ? ine"te& capital of VV 500,000Bon" to UU an& YY (ol& partner") P 105,000

The 'on" ol& 'e a&&e& to UU an& YY/UU/ MP00,000 9 (P105,000 x 3?5)N P 3,000

YY/ MP#$0,000 9 (P105,000 x 2?5)N 522,000VV 35,000

Total a*ree& capital P 1,5$0,000

or the prpo"e" of coparin* 'on" an& *oo&ill, there are to alternatie" pre"ente&/8lternatie 1/ if *oo&ill i" fon& to exi"t/

UU YY VVGoo&ill Retho& i" "e& P $52,000 P #$,000 P 500,000Bon" Retho& i" "e& P 3,000 P 522,000 P 35,0008&&/ Goo&illJ (#5%/ 30%/25%) 1$,000 12,000 105,000

P$52,000 P #$,000 P 500,000(Gain) :o"" < Bon" etho& P 0 P 0 P 0

JUU/ 75% x 3?5 H #5%K YY/ 75% x 2?5 H 30%

8lternatie 2/ If *oo&ill i" not reali@e& an& ritteno a" a lo""/UU YY VV

Goo&ill Retho& i" "e& P $52,000 P #$,000 P 500,000:e""/ riteo of *oo&illJ 1$,000 12,000 105,000

P 33,000 P 522,000 P 35,000Bon" Retho& i" "e& 3,000 522,000 35,000(Gain) :o"" < Bon" etho& P 0 P 0 P 0

32. Be in&ierent for the *oo&ill (realation) or 'on" etho&" are the "ae. JGoo&ill (realation) etho&/

8ont pai& P300,000:e""/ Boo ale of intere"t < eal (#0%)) 250,000Partial *oo&ill?realation a&D"tent P 50,000apitali@e& at #0%

Goo&ill?realation P125,000

eal Paler Appeapital 'alance" 'efore ith&raal 250,000 150,000 100,0008llocate *oo&illJ 50,000 37,500 37,500

300,000 1$7,500 137,500ith&raal of eal (300,000)

1$7,500 137,500riteo Ipaire& Goo&ill (125,000 × 0.50) (2,500) (2,500)

0 125,000 75,000 apital 'alance" "in* the 'on" etho&JJ 125,000 75,000



33. Prefer 'on" etho& &e to Paler+" *ain of P12,500 eal Paler Appe

apital 'alance" 'efore ith&raal 250,000 150,000 100,0008llocation of *oo&illJ 50,000 37,500 37,500

300,000 1$7,500 137,500

ith&raal of eal (300,000) 0 1$7,500 137,500riteo Ipaire& Goo&ill

125,000 × 0.0 (75,000)

125,000 × 0.#0 (50,000) 0 112,500 $7,500

apital 'alance" "in* the 'on" etho&JJ 125,000 75,000(Gain) :o"" < Bon" etho& 0 12,500 12,500

JJThe exce"" pai& to eal of P50,000 ol& hae 'een &ii&e& eall! 'eteen Paler an&Appe a" follo"/

Paler Appe

apital 'alance 'efore ith&ra 150,000 100,000 8llocation of exce"" pai& to eal (25,000) (25,000) apital 'alance "in* 'on" etho& 125,000 75,000

3#. P$2,000arr!in* ale of net a""et" (P100,000 < P20,000)---------P $0,000

8&&/ 8&D"tent" to re`ect fair ale-------------- 12,000air ale of net a""et"---------------------. P 2,000:e""/ oon "toc, P1 par (5,000 "hare" x 2 x P1--------... 10,0008&&itional pai&in capital-------------------- P$2,000

35. P5#,350

arr!in* ale of net a""et" (P25,110 9 P20,000))--------- P #5,1108&&/ 8&D"tent" to re`ect fair ale (P2$,000 < P21,70) < P$00 9 M(P35,000 < (P32,#00 < P11,200)N- 1,2#0air ale of net a""et"---------------------. P #,350:e""/ oon "toc, P1 par (10,000 "hare" x P1)--------... 10,0008&&itional pai&in capital-------------------- P 5#,350#ote$ ,efer to Problem -.. for /ournal entries for further analysis

,4>ORI>',rue or alse1.

al"e . al"e 11.

Tre 1.

Tre 21.

al"e 2. al"e

31.

Tre

2

.

Tre 7. al"e 12

.

Tre 17

.

Tre 22

.

Tre 27. Tre 32

.

Tre

3.

al"e $. Tre 13.

Tre 1$.

al"e 23.

al"e 2$. al"e

#.

Tre . al"e 1#.

al"e

1.

al"e 2#.

Tre 2. Tre

5.

al"e 10.

al"e 15,

Tre 20.

Tre 25.

al"e 30. al"e

#ote for the following numbers$



*$ " dissolution occurs ever time there is a chan!e in relationship amon! the partners$,his can occur when a new partner enters the partnership or an eistin! partner leavesthe partnership$ " dissolution occurs when the partnership is !oin! out o business butthe termination o business is not a reDuirement or a dissolution$

3$ " new partnerEs liabilit or actions that occurred beore #oinin! the partnership islimited to the amount invested in the partnership$

1$ Re!ardless how a new partner enters a partnership/ the other partners have to

approve the admission because the must accept unlimited liabilit due to actions othe new partner ta%en on behal o the partnership$

7$ ,here is no necessar relationship between the percenta!e o eDuit acDuired and theamount o prot or loss received$ ,hese are separate contractual issues$

F$ ,here are three methods that ma be used when a new partner is pain! an amountmore than boo% value or the investment: revaluation o eistin! assets/ bonus method/and !oodwill method$ ,he partners do not have to choose one method$ It would not beinconsistent to revalue the assets and appl either the bonus or the !oodwill method torecord the investment$

$ >istin! partners share the diHerence between mar%et value and boo% value eDuall ithat is the manner in which prots and losses are shared$ I prots and losses areshared in some other manner/ then the diHerence between mar%et and boo% values areshared in that manner$

*5$ &hile it is possible that an error has been made/ it is more li%el that the eistin!partners reco!ni<ed an increase in their capital accounts via a bonus$ ,he diHerence

between the amount credited to the new partner;s capital account and the amountinvested is shared b the eistin! partners$

*0$ New partners ma receive a bonus i the brin! value to the partnership in ecess othe tan!ible assets invested$ ,his additional amount ma be rom such thin!s asepertise/ eperience/ or business contacts$ ,he bonus allocated to the new partner ispament or these tpes o unidentiable assets contributed to the partnership$

*$ Goodwill ma be reco!ni<ed with re!ard to the eistin! partners but it ma also bereco!ni<ed with re!ard to the new partner$

*$ &hen !oodwill is reco!ni<ed with re!ard to the new partner/ the new partner;s capitalaccount will be !reater than the amount invested b the reco!ni<ed !oodwill$

+*$ ,he articles o partnership ma include an a!reement on the len!th o advanced noticea partner must !ive beore withdrawin! rom a partnership$ ailure to provide thea!reed notice ma result in the withdrawin! partner bein! liable or dama!es suHeredb the partnership$

+3$ I eistin! partners acDuire a withdrawin! partner;s eDuit/ the can divide thepurchase o that eDuit amon! themselves in an manner the choose$+1$ Partnership assets ma be revalued but the ma also remain at their carrin! value$+7$ ,he revaluation o the partnership;s assets is unrelated to the purchase o the

withdrawin! partners ownership interest in the partnership$+$ ,he revaluation o partnership assets at the time o a partner;s withdrawal has no

impact on the reco!nition o a bonus or !oodwill$35$ &hile the partners can reco!ni<e either the withdrawin! partner;s !oodwill or the

entire partnership;s !oodwill/ there is no reDuirement to reco!ni<e an !oodwill when apartner withdraws rom a partnership$

@ultiple Choice33.

' 3$.

e #3.

c #7.

a 53.

c 5$. a 3.

c

3# & 3. e ##. c #$. c 5#. c 5. c #. &

35.

& #0.

& #5.

& 50.

c 55.

c 0. ' 5.

c

3.

& #1.

& #.

c 51.

a 5.

' 1. ' .

&

37.

& #2.

' #7.

' 52.

& 57.

' 2. ' 7.

&

$ a



.

Dayag Chapter 3

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Transcript of Dayag Chapter 3