1 (B) AK - 70% BK - 30%

Capital balances 2,625,000.00 2,056,250.00

Equipment - underdepreciation (87,500.00)
Equipment - overdepreciation 131,250.00
Allowance for doubtful accounts (297,500.00) (196,875.00)
Worthless inventories (21,875.00) (15,312.50)
Adjusted capital balances 2,218,125.00 1,975,312.50
Total capital
AK - 70% (to proportion to their P/L ratio)
BK - 30%

2 (A) AB QR
Capital balances (Assets minus Liabilities) 652,000.00 724,000.00
AB pays off his notes payable (add) 140,000.00
QR overstated inventories (24,000.00)
AB machinery - overdepreciated 20,000.00
Adjusted capital balances 812,000.00 700,000.00
x 120%
Capital Credit of QR (20% higher than AB) 974,400.00
Initial Investment of QR - 700,000.00
Additional investment to be made by QR (cash) 274,400.00
Initial cash investment of AB and QR (136,000 + 76,000) 212,000.00
Total cash of the partnership 486,400.00 (A)

3 (C) CD
Capital balance (Assets at book values) 4,680,000.00
Accounts Receivable - uncollectible (32,000.00)
Inventory - written off (1120000 - 1040000) (80,000.00)
Machinery - obsolete at carrying value (384000 - 336000) (48,000.00)
Patent - unsuccessfully defended (56,000.00)
Net fair value of assets 4,464,000.00
MV cash investment (3,120,000.00)
MV - fair value of equipment 1,344,000.00 (C)
Equal investment by CD and MV

4 (D)
MG - 1,475,000
AN - 1,112,500

(1,475,000 + x) = 1,112,500 + x
1.1

1,475,000 + x = (1,112,500 + x) 1.1

1,475,000 + x = 1,223,750 + 1.1x
0.1x = 251,250
0.1 0.1
x = 2,512,500 (each partner's cash investment)
Cash = 2 x 2,512,500
 = 5,025,000 (D)

5 (C) CY CR
Capital balances 175,000.00 240,000.00
Additional investment 150,000.00 120,000.00
Withdrawal (40,000.00)
Adjusted balances 285,000.00 360,000.00
10% interest (7/12, beginning June 1 to Dec 31 is 7 months) 16,625.00 21,000.00
Salary (prorate 7/12, given is annual salary) 35,000.00 43,750.00
Remainder, 3:2 90,000.00 60,000.00
426,625.00 (C)

6 (A) AY AN
Salary 261,000.00 259,000.00
Interest 30,000.00 30,000.00
Remainder, 50% each (2,500.00) (2,500.00)
(A) 286,500.00

7 (A)

Sorry, we don't have the solution for this.

8 (C) PG SX
Interest on capital balances 10% 9,600.00 4,800.00
Salaries 24,000.00
Remainder, to be divided equally
(C)

9 (D) D - 50% N - 30%

Capital balances 400,000.00 300,000.00

Vera's investment is 5/6 of her 30% capital credit. 5/6 x 30% = 25%
Old partners' interest 75%

D - 50% N - 30%
Capital balances 400,000.00 300,000.00
Share in bonus (30,000.00) (18,000.00)
Capital balances after admission of Vera 282,000.00

10 (D) SG
AP
TS
Bonus to DJ
Capital balance of old partners
Interest of old partners, DJ's interest is 25%
Total partnership capital
 DJ's capital credit
Bonus to DJ from old partners
DJ's cash investment

11 (B) PV BK
(B) 350,000.00 525,000.00
Capital transfer to JP

Share in Net income, 5:3:2 (210,000 - 35,000) 87,500.00 52,500.00

Increase in BK's capital due to JP's admission 10,500.00
Change in capital due to JP's admission 150,500.00
588,000.00 588,000.00
**Amounts in red are the ones to be computed using t

12 (C) PV BK
Capital balances as given 350,000.00 525,000.00
Share in net income, 5:3:2 (210,000 - 35,000) 87,500.00 52,500.00
Adjusted capital balances 437,500.00 577,500.00

Capital credit of JP is 20% x 1837500

The capital credit of the old partners is (1,837,500 x 80%) 588,000.00 588,000.00
to be divided 4:4:2 in accordance with their agreement.

13 (C) Assets VL
2,250,000.00 518,750.00
Loan 125,000.00
Asset Revaluation (2,550,000 - 2,250,000), 25%, 25%, 50% 300,000.00 75,000.00
Net loss, 25%, 25%, 50% (750,000) (187,500.00)
531,250.00
Cash settlement (542,500.00)
Bonus from remaining partners, shared 25:50 11,250.00

14 (A)

Underdepreication of fixed asset

Payment to TD upon retirement
Asset balance
Less: Liabilities (787500 - 101500 - 112000 - 134750)
Net assets

15 (C) E J
Capital balances 70,000.00 84,000.00
Share in net income 48,000, according to beginning capital ba 16,000.00 19,200.00
Settlement to E (76,560.00)
Bonus from E to remaining partners (shared based on beginnin (9,440.00) 5,664.00
- 108,864.00
 **The given sharing is for loss. To share profit, you base it on capital balances.

16 (B) and (D) L M

Capital balances 625,000.00 750,000.00
Salary 75,000.00 75,000.00
Interest of 3% 18,750.00 22,500.00
Remainder, 2:4:4 16,125.00 32,250.00
Adjustment for Equipment +50000 10,000.00 20,000.00
Adjustment for Depreciation -5000 (1,000.00) (2,000.00)
Adjustment for Inventory +50000 10,000.00 20,000.00
753,875.00 917,750.00
Bonus from retiring partner to remaining partners 16,125.00 32,250.00
770,000.00

L M
Capital balances 625,000.00 750,000.00
Salary 75,000.00 75,000.00
Interest of 3% 18,750.00 22,500.00
Remainder, 2:4:4 16,125.00 32,250.00
Adjustment for Equipment +50000 10,000.00 20,000.00
Adjustment for Depreciation -5000 (1,000.00) (2,000.00)
Adjustment for Inventory +50000 10,000.00 20,000.00
753,875.00 917,750.00
Bonus from remaining partners to retiring partner (13,875.00) (27,750.00)
890,000.00

END

AN: For the two people asking for solution manuals. I'll try to encode the rest in the following days. Thank you. 09.21
4,193,437.50
2,935,406.25 (B)
1,258,031.25
 Totals
37,625.00
78,750.00
150,000.00
266,375.00 Net Income

Totals
520,000.00
60,000.00
(5,000.00)
575,000.00 Net Income

TD Totals
3,200.00 17,600.00
16,000.00 40,000.00
(28,000.00) (84,000.00)
(8,800.00) (26,400.00) Net loss

T - 20% Total
200,000.00 900,000.00
75%
Total capital 1,200,000.00 25% 300,000.00 Actual investment
30% 360,000.00 Capital credit
(60,000.00) Bonus from old partners to Vera

T - 20%
200,000.00
(12,000.00)
(D)

784,000.00
2,730,000.00
1,190,000.00
(735,000.00)
3,969,000.00
rs, DJ's interest is 25% 75%
5,292,000.00
x 25%
 1,323,000.00
(735,000.00)
588,000.00 (D)

TF JP Given: Capital investment of JP, his interest is 20%,

700,000.00 87,500.00 367,500.00
280,000.00 20%
BONUS to JP 1,837,500.00
35,000.00 150,500.00 from PV x 80%
10,500.00 from BK 1,470,000.00 Capital of the old partners PV, B
(441,000.00) (441,000.00) from TF 588,000.00 40% - PV and BK
294,000.00 367,500.00 (280,000.00) to JP 294,000.00 20% - TF
e the ones to be computed using the available info.

TF JP
700,000.00 87,500.00
35,000.00 TOTAL
735,000.00 87,500.00 1,837,500.00

367,500.00
294,000.00

MD LV
481,250.00 1,125,000.00

75,000.00 150,000.00
(187,500.00) (375,000.00)
368,750.00 900,000.00

(3,750.00)

365,000.00 (C)

Asset
787,500.00
f fixed asset (26,250.00)
(93,100.00)
668,150.00
00 - 101500 - 112000 - 134750) (439,250.00)
228,900.00 (A)

M
56,000.00 210,000.00
12,800.00

3,776.00
(C)
 N Totals
937,500.00
75,000.00 225,000.00
28,125.00 69,375.00
32,250.00 80,625.00
20,000.00 375,000.00 Net Income
(2,000.00)
20,000.00
1,110,875.00
(48,375.00)
1,062,500.00 (B)

N Totals
937,500.00
75,000.00 225,000.00
28,125.00 69,375.00
32,250.00 80,625.00
20,000.00 375,000.00 Net Income
(2,000.00)
20,000.00
1,110,875.00
41,625.00
1,152,500.00 (D)

following days. Thank you. 09.21.2016

estment of JP, his interest is 20%, he received capital transfer for old partners in the amount of 280,000

Capital of the old partners PV, BK and TF

40% - PV and BK