MYRNA and NORMA are partners sharing profits and losses in the ratio of 60% and 40%, respectively. The partnership balance sheet at August 30, 2020 follows:

Cash                     P 27,000            Accounts payable       P 30,000

Other assets           266,000           MYRNA, Loan                13,000

NORMA, Loan          20,000           MYRNA, capital            180,000

                                                       NORMA, capital              90,000

Total                     P 313,000          Total                           P 313,000

At this date, OLGA was admitted as a partner for a consideration of P97,500 cash for a 40% interest in capital and in profits.

1. Assume OLGA is admitted by purchase of 40% each of the original partners’ interest, determine how the P97,500 will be apportioned to MYRNA and NORMA

2. Assume OLGA is admitted by investing the P97,500 into the partnership, determine the effects of any bonus over the capital balances of the original partners.

Answer rating: 100% (QA)

Part 1 Myrna Norma Total Capital 180000 90000 270000 Dist... View the full answer