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    CHAPTER 7-Corporations in Financial Difficulty: Liquidation

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    This document discusses two questions related to partnerships: 1. Andro and Bino have formed a partnership. Andro contributed cash and equipment, while Bino contributed merchandise. To finalize the agreement, Andro needs to make an additional investment or withdrawal. 2. CC and DD will become partners in a business. CC's capital and asset values are adjusted based on allowances and expenses. DD will invest cash to obtain a 1/3 interest. The questions ask to compute CC's adjusted capital and DD's cash investment amount.

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    CHAPTER 7-Corporations in Financial Difficulty: Liquidation

    Uploaded by

    linkin soy
    26 views1 page
    This document discusses two questions related to partnerships: 1. Andro and Bino have formed a partnership. Andro contributed cash and equipment, while Bino contributed merchandise. To finalize the agreement, Andro needs to make an additional investment or withdrawal. 2. CC and DD will become partners in a business. CC's capital and asset values are adjusted based on allowances and expenses. DD will invest cash to obtain a 1/3 interest. The questions ask to compute CC's adjusted capital and DD's cash investment amount.

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    CHAPTER 7.1.1

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    This document discusses two questions related to partnerships: 1. Andro and Bino have formed a partnership. Andro contributed cash and equipment, while Bino contributed merchandise. To finalize the agreement, Andro needs to make an additional investment or withdrawal. 2. CC and DD will become partners in a business. CC's capital and asset values are adjusted based on allowances and expenses. DD will invest cash to obtain a 1/3 interest. The questions ask to compute CC's adjusted capital and DD's cash investment amount.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    26 views1 page

    CHAPTER 7-Corporations in Financial Difficulty: Liquidation

    Uploaded by

    linkin soy
    This document discusses two questions related to partnerships: 1. Andro and Bino have formed a partnership. Andro contributed cash and equipment, while Bino contributed merchandise. To finalize the agreement, Andro needs to make an additional investment or withdrawal. 2. CC and DD will become partners in a business. CC's capital and asset values are adjusted based on allowances and expenses. DD will invest cash to obtain a 1/3 interest. The questions ask to compute CC's adjusted capital and DD's cash investment amount.

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    © All Rights Reserved
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    CHAPTER 7-Corporations in Financial Difficulty: Liquidation

    1. Andro and Bino have just formed a partnership. Andro contributed cash of P 782,000 and office
    equipment that cost P 390,000. The equipment had been used in sole proprietorship and had been
    80% depreciated. The current fair value of the equipment is P252,000. An unpaid mortgage loan on
    the equipment of P84,000 will be assumed by the partnership. Andro is to have a 60% interest in the
    partnership net assets.Bino is to contribute only merchandise with a fair value of P630,000. Both
    partners agreed on profit and loss ratio of 55% to Andro and the balance to Bino. To finalize the
    partnership agreement, Andro should make additional investment (withdrawal) of cash in the amount
    of
    a. P(12,000) b. P(180,000) c. P88,000 d. P(5,000)

    2. CC and DD as a partner in business. Accounts in the ledger for CC on November 30, 2011, just before
    the admission of DD, show the following balances:

    Cash P 6,800
    Accounts Receivable 14,200
    Merchandise Inventory 20,000
    Accounts Payable 8,000
    CC, Capital 33,000
    It is agreed that for purposes of establishing CC’s interest, the following adjustment shall be made:
    a) An allowance for doubtful accounts of 3% of accounts receivable is to be established.
    b) The merchandise inventory is to be valued at P23,000.
    c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized.

    DD is to invest sufficient cash to obtain a 1/3 interest in the partnership. Compute for (1) CC’s adjusted
    capital before the admission of DD; and (2) the amount of cash investment by DD:
    a. (1) P35,347; (2) P11,971 c. (1) P35,374; (2) P17,687
    b. (1) P36,374; (2) P18,487 d. (1) P28,174; (2) P14,087

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