Advanced Accounting Guerrero Peralta Volume 1 Solution Manual (Comprehensive Solutions)

lOMoAR cPSD| 6306152




Advanced Accounting Guerrero Peralta Volume 1 Solution
Manual

, lOMoAR cPSD| 6306152




Partnership – Basic Considerations and Formation 1

CHAPTER 1

MULTIPLE CHOICE ANSWERS AND SOLUTIONS

1-1: a
Jose's capital should be credited for the market value of the computer contributed by
him.
1-2: b (40,000 + 80,000)  2/3 = 180,000 x 1/3 = 60,000.

1-3: a
Cash P100,000
Land 300,000
Mortgage payable ( 50,000)
Net assets (Julio, capital) P350,000

1-4: b
Total Capital (P300,000/60%) P500,000
Perla's interest 40%
Perla's capital P200,000
Less:Non-cash asset contributed at market value
Land P 70,000
Building 90,000
Mortgage Payable ( 40,000) _120,000
Cash contribution P 80,000

1-5: d - Zero, because under the bonus method, a transfer of capital is only required.

1-6: b
Reyes Santos
Cash P200,000 P300,000
Inventory – 150,000
Building – 400,000
Equipment 150,000
Mortgage payable ( 100,000)
Net asset (capital) P350,000 P750,000

1-7: c
AA BB CC
Cash P 50,000
Property at Market Value P 80,000
Mortgage payable ( 35,000)
Equipment at Market Value P55,000
Capital P 50,000 P 45,000 P55,000

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2 Chapter 1


1-8: a
PP RR SS
Cash P 50,000 P 80,000 P 25,000
Computer at Market Value 25,000 60,000
Capital P 75,000 P 80,000 P 85,000
1-9: c
Maria Nora
Cash P 30,000
Merchandise inventory P 90,000
Computer equipment 160,000
Liability ( 60,000)
Furniture and Fixtures 200,000
Total contribution P230,000 P190,000

Total agreed capital (P230,000/40%) P575,000
Nora's interest 60%
Nora's agreed capital P345,000
Less: investment 190,000
Cash to be invested P155,000

1-10: d
Roy Sam Tim
Cash P140,000 – –
Office Equipment – P220,000 –
Note payable _( 60,000)
Net asset invested P140,000 P160,000 P –

Agreed capitals, equally (P300,000/3) = P100,000

1-11: a
Lara Mitra
Cash P130,000 P200,000
Computer equipment – 50,000
Note payable _( 10,000)
Net asset invested P130,000 P240,000

Goodwill (P240,000 - P130,000) = P110,000

1-12: a
Perez Reyes
Cash P 50,000 P 70,000
Office Equipment 30,000 –
Merchandise – 110,000
Furniture 100,000
Notes payable ( 50,000)
Net asset invested P 80,000 P230,000

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Partnership – Basic Considerations and Formation 3

1-12: Continued
Bonus Method:
Total capital (net asset invested) P310,000

Goodwill Method:
Net assets invested P310,000
Add: Goodwill (P230,000-P80,000) _150,000
Net capital P460,000

1-13 : b
Required capital of each partner (P300,000/2) P150,000
Contributed capital of Ruiz:
Total assets P105,000
Less Liabilities 15,000 90,000

Cash to be contributed by Ruiz P 60,000

1-14 : d
Total assets:
Cash P 70,000
Machinery 75,000
Building _225,000 P370,000
Less: Liabilities (Mortgage payable) 90,000
Net assets (equal to Ferrer's capital account) P280,000
Divide by Ferrer's P & L share percentage 70%
Total partnership capital P400,000

Required capital of Cruz (P400,000 X 30%) P120,000
Less Assets already contributed:
Cash P 30,000
Machinery and equipment 25,000
Furniture and fixtures 10,000 65,000

Cash to be invested by Cruz P 55,000

1-15 : d
Adjusted assets of C Borja
Cash P 2,500
Accounts Receivable (P10,000-P500) 9,500
Merchandise inventory (P15,000-P3,000) 12,000
Fixtures 20,000 P 44,000
Asset contributed by D. Arce:

Cash P 20,000
Merchandise 10,000 30,000

Total assets of the partnership P 74,000