Reyes and Santiago are partners who share profits and losses in the ratio of 7:3, respectively....

  

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Reyes and Santiago are partners who share profits and losses in the ratio of 7:3, respectively. On January 1, 2022, their capital accounts are: Reyes Santiago Total (b) P480,000 320,000 P800,000 Torres is admitted for a 40% interest in the partnership by paying directly the partners a total amount of P480,000. Required: (a) Give the entry in the partnership books to record Torres's admission. How should the P480,000 cash be divided between Reyes and Santiago? Mendez wishes to purchase one-fourth interest in the partnership of Nocum, Olivar, and Perez. The three partners agree to sell to Mendez one-fourth of their respective capital and profit and loss interests in exchange for a payment of P2,000,000. The partners' capital accounts and the profit and loss ratio immediately before the admission of Mendez are as follows: Nocum Olivar Perez Capital Accounts P 3,200,000 2,000,000 1,200,000 P 6,400,000 All assets and liabilities are fairly valued. Required: P/L Ratio 60% 30% 10% 100% (a) Give the entry in the partnership books to record Mendez's admission. (b) Immediately after Mendez's admission, what should be the capital balances of Nocum, Olivar, and Perez, respectively? Reyes and Santiago are partners who share profits and losses in the ratio of 7:3, respectively. On January 1, 2022, their capital accounts are: Reyes Santiago Total (b) P480,000 320,000 P800,000 Torres is admitted for a 40% interest in the partnership by paying directly the partners a total amount of P480,000. Required: (a) Give the entry in the partnership books to record Torres's admission. How should the P480,000 cash be divided between Reyes and Santiago? Mendez wishes to purchase one-fourth interest in the partnership of Nocum, Olivar, and Perez. The three partners agree to sell to Mendez one-fourth of their respective capital and profit and loss interests in exchange for a payment of P2,000,000. The partners' capital accounts and the profit and loss ratio immediately before the admission of Mendez are as follows: Nocum Olivar Perez Capital Accounts P 3,200,000 2,000,000 1,200,000 P 6,400,000 All assets and liabilities are fairly valued. Required: P/L Ratio 60% 30% 10% 100% (a) Give the entry in the partnership books to record Mendez's admission. (b) Immediately after Mendez's admission, what should be the capital balances of Nocum, Olivar, and Perez, respectively?

Answer rating: 100% (QA)

a Entry to record Torress admission in the partnership books Torress admission is recorded by debiti... View the full answer