Solution manual advanced accounting by baysa lupisan chapter 02

Asset Revaluation method Capital balances before admission Capital balances after admission Exercise 2 - 9 1a.. Bonus Method 1b.. Asset Revaluation Method... The bonus method will be pr

CHAPTER 2 Partnership Dissolution EXERCISES Exercise 2 – 1

2 P280,000 + P320,000 + P200,000 = P800,000

Exercise 2 –2

Exercise 2 – 3

1.

2

P140,000/ ¼ = P560,000 – (P200,000 + P 160,000 +

P120,000)

3

old (3/4) P532,500 P480,000 P52,500 new (1/4) 177500 230,000 (52,500)

P710,000 P710,000

P -0 -Exercise 2 – 4

1.

2

3

old (3/4) P540,000 P450,000 P90,000 new (1/4) 180,000 270,000 (90,000)

P720,000 P720,000 P -0 -4

old (3/4) P 810,000 P450,000 P360,000 new (1/4) 270,000 270,000

5

Exercise 2-5

1a Bonus Method

old (3/4) P585,000 P600,000 P(15,000) new (1/4) 195,000 180,000 15,000

P780,000 P780,000 P -0 -1b Revaluation of Assets Method (AC = P180,000 ÷ 1/4 = P720,000)

Alba, Capital (P60,000 x 40%) 24,000

To record revaluation of assets

Net advantage to Medel using the asset revaluation method P 2,333

Exercise 2 - 6

P120,000 x 1/2 = P60,000

Cash invested in the partnership 60,000

Exercise 2 – 7

Bonus method

Capital after admission of Estacio P1,024,000 P816,000 P460,000 P2,300,000

Asset Revaluation method

Adjustment of fixed assets to fair value 120,000 80,000 200,000 Capital after admission of Estacio P1,120,000 P880,000 P500,000 P2,500,000

Exercise 2 – 8

1 Bonus method

Capital balances before admission

Bonus to old partners 10,950 25,550 ( 24,000) ( 12,500)

Capital balances after admission

2 Asset Revaluation method

Capital balances before admission

Capital balances after admission

Exercise 2 - 9

1a Bonus Method

1b Asset Revaluation Method

2 The bonus method will be preferred by Manzano

Bonus Method Asset Rev

Capital of Manzano after additional depreciation P260,000 P200,000 Net advantage to Manzano with the use of the bonus

Exercise 2 – 10

1.

2

3

P460,000 – P400,000 = P60,000/ 1/3 = P180,000

Exercise 2 – 11

Interest of Guzman upon retirement P108,000

P120,000 – P108,000 = P12,000/ 30% = P40,000

2

Exercise 2 – 12

Belen, Capital 40,000

Exercise 2 - 13

PROBLEMS Problem 2 - 1

Nava, Capital 120,000

P540,000 – P360,000 = P180,000

Locsin, Capital [(P240,000 + P135,000) 1/3] 125,000

540,000 540,000

new (1/4) 180,000 180,000

720,000* 540,000 180,000 *180,000 ÷ 1/4 = 720,000

10 Cash 144,000

Problem 2 - 2

1

P820,000 P820,000 -2

P960,000 – P600,000 = P360,000

P180,000/ 25% = P720,000 – P600,000 = P120,000

P220,000/ 25% = P880,000 – P820,000 = P60,000

Cash 220,000

Problem 2-3

new (1/4) 90,000 90,000

720,000* 765,000 (45,000)

765,000 765,000

P90,000/ 1/8 = P720,000 – P675,000 = P45,000

Problem 2 - 4

P187,500/80% = P234,375 x 20% = P46,875

c Lapuz, Capital 13,388

Roces = (P234,375 x 50%) – P103,800 = P13,388

Lapuz = (P234,375 x 30%) - P83,400 = (P13,388)

2

Roces, Lapuz and Doria Statement of Financial Position

April 1, 2008

ASSETS LIABILITIES and PARTNERS’ CAPITAL

TOTAL LIABILITIES and

Problem 2 -5

Bonus to old partners 6,000 6,000 8,000 (20,000)

Capital balances after admission

2 Roldan 30% x 75% = 22.5%

Angeles 30% x 75% = 22.5%

Lazaro 40% x 75% = 30%

Problem 2 – 6

(P200,000 – P19,000 + P19,000 – P20,000) 1/3 = P60,000

(P150,000 – P19,000 + P19,000 – P14,000) 1/3 = P45,333

Capital balances before admission of Nuguid P199,000 P155,000 P354,000

Capital balances after revaluation P180,000 P136,000 P316,000

Fraction of interest transferred to Nuguid x 1/3 x 1/3 x 1/3

Interest transferred to Nuguid P 60,000 P 45,333 P105,333

Capital balances before admission of Nuguid P199,000 P155,000

Interest transferred to Nuguid ( 60,000) ( 45,333) 105,333

Capital balances, December 31, 2008 P123,000 P 96,667 P 95,333

P315,000 + P85,000 = P400,000 x 1/4 P100,000 – P85,000 =

P15,000

Problem 2 - 7

Problem 2-8

Capital balances, December 31, 2008 P 86,400 P 39,600 P 40,000

P39,600 – P30,000 = P9,600 / 20% = P48,000

P48,000 – P39,600 = P8,400/ 20% = P42,000

Problem 2 - 9

P420,000 P420,000

Guzman, Capital 36,000 P120,000 x 30% = P36,000

Problem 2 -10

Canda, Pardo and Andres Statement of Changes in Partners’ Equity For the Period January 1, 2006 to January 1, 2009

Original capital, January 1, 2006 P 62,500 P 25,000 P 12,500 P 100,000 Corrected 2006 net profit 26,375 10,550 5,275 42,200

Corrected 2007 net profit 10,875 4,350 2,175 17,400

Corrected 2008 net loss ( 6,750) ( 2,700) ( 1,350) ( 10,800)

Schedule of computation of corrected net profit

Understatement of accrued expenses 2006 ( 400 ) 400

2007 ( 500 ) 500

Understatement of accrued revenues 2006 250 ( 250 )

2007 100 ( 100 )

Overstatement of inventories 2006 ( 1,500 ) 1,500

2007 ( 2,000 ) 2,000

Understatement of depreciation exp ( 150 ) ( 350 ) ( 200 )

2 a Revenue Receivable 150

Problem 2 -11

Abelar and Berces Statement of Changes in Partners’ Equity For the Period January 1, 2007 to January 15, 2009

Capital balances before closing the

Admission of Custodio (Sch 2) (7,800) (5,200) P 33,000 20,000

Loss on realization on Jan 15, 2009 (16,520) (11,800)` (18,880) (47,200)

Schedule 1 - Distribution of 2007 net profit

Abelar_ Berces Total

Schedule 2 - Admission of Custodio

MULTIPLE CHOICE

3 B P264,000 – [(P278,000 + P418,000 + P192,000) x 1/5] = P86,400

4 A Lima = P100,000 x 80% = P80,000

Mitra = P 50,000 x 80% = P40,000

Lima = [P100,000 + (P150,000 x 75%)] x 80% P170,000 Mitra = [P 50,000 + (P150,000 x 25%)] x 80% P 70,000

Capital bal before transfer to Desta P 24,380 P 50,860 P 75,240 Required capital based on orig capital

ratio after transfer to Desta of 1/4 int 18,810 37,620 56,430 Capital to be transferred to Desta P 5,570 P 13,240 P 18,810 Excess cash to be dist based on orig

capital ratio (P30,000 - P18,810) 3,730 7,460 11,190 Distribution of cash to Felix and Elias P 9,300 P 20,700 P 30,000

9 C P90,000 – P75,000 = P15,000

Share in the bonus from Zamora [(P90,000 – P75,000) 1/2) 7,500

12 D P195,000 – (P525,000 x 1/3 = P175,000) = P20,000

Capital balances before adm of Vidal P504,000 P252,000 P 84,000 Asset revaluation

(P180,000/20% ) – P840,000 = P60,000 36,000 18,000 6,000

Capital balances after adm of Vidal P432,000 P216,000 P 72,000

Amount to be invested by Vidal in the partnership P 280,000

Capital contribution = P95,000 + P80,000 + P60,000 + P80,000 = 315,000

17 A P80,000 + P12,000 – P70,000 = P22,000

Share in the recorded asset revaluation (P15,000 x 3/10) 4,500 Share in the bonus from Manalo

[(P80,000 + P12,000) - P70,000] x 3/10 6,600

Capital balances, April 30, 2008 P 360,000 P 225,000 P 135,000 1/6 Interest transferred to Magno ( 60,000) ( 37,500) ( 22,500) P 120,000

Cash transfers to equalize investment ( 100,000) 12,500 87,500

Distribution of net profit -equally 3,150 3,150 3,150 3,150 Withdrawals ( 1,500) ( 2,000) ( 1,500) ( 2,000) Capital, June 30, 2008 P 201,650 P 201,150 P 201,650 P121,150

20 A Agreed capital = (P201,650 + P201,150 + P201,650) ÷ 3/4 = P805,933

Asset revaluation method:

Capital contributions of partners P600,000 P480,000 P500,000

Additional depreciation ( 140,000) ( 140,000) ( 140,000)

Bonus method:

Capital contributions of partners P600,000 P480,000 P500,000 Bonus to old partners from new partner 63,000 42,000 ( 105,000)

Uncollectible accounts ( 20,000) ( 35,000)

Other assets written off ( 2,000) ( 3,600)

P1,297,528

23 C Total capital P614,476 +P683,052

P2,265,118

Required capital P1,297,528/2 648,764 648,764

27 C The capital balances would be the same as the balances prior to sale of interest

30 D P4,000 x 2/5 = P1,600

31 D P3,000 / 40% = P7,500

Adjustment of assets to FMV 12,000 12,000 24,000

P115,000 P 89,000 P204,000

Capital of retiring partner