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Chapter 13
Partnership Dissolution
2. Solutions:
Requirement (a):
Date A, Capital (400,000 x 10% x 30%) 12,000
B, Capital (400,000 x 10% x 70%) 28,000
C, Capital (400,000 x 10%) 40,000
to record the admission of C to the partnership
Requirement (b):
A B C Totals
Capital, beg. 150,000 250,000 - 400,000
Credit - - 40,000 40,000
Debit (12,000) (28,000) - (40,000)
Capital, end. 138,000 222,000 40,000 400,000
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3. Solution:
Date Building 200,000
A, Capital (200,000 x 30%) 60,000
B, Capital (200,000 x 70%) 140,000
to record the revaluation of the building
Date A, Capital (600,000* x 10% x 30%) 18,000
B, Capital (600,000* x 10% x 70%) 42,000
C, Capital (600,000* x 10%) 60,000
to record the admission of C to the
partnership
4. Solutions:
Requirement (a):
Date Cash 100,000
C, Capital 100,000
to record the admission of C to the partnership
Requirement (b):
A B C Totals
Capital, beg. 150,000 250,000 - 400,000
Admission of C - - 100,000 100,000
Capital, end. 150,000 250,000 100,000 500,000
Requirement (c):
A = (100% - 10% interest of C) x 30%/100% = 27%
B = (100% - 10% interest of C) x 70%/100% = 63%
C = 10%
5. Solutions:
Requirement (a):
Date Cash 100,000
C, Capital 80,000
A, Capital (20,000 x 30/100) 6,000
B, Capital (20,000 x 70/100) 14,000
to record the admission of C to the partnership
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Requirement (b):
A B C Totals
Capital, beg. 150,000 250,000 - 400,000
Admission of C - - 80,000 80,000
Bonus to old partners 6,000 14,000 20,000
Capital, end. 156,000 264,000 80,000 500,000
6. Solution:
A, Capital 150,000
B, Capital 250,000
Total capital of existing partnership 400,000
Divide by: (100% less 10% interest of C) 90%
Total capital of new partnership 444,444
Multiply by: Interest of C 10%
Investment of C 44,444
7. Solution:
8. Solution:
1. Solution:
2. Solutions:
Requirement (a):
Date A, Capital (480,000 x 10% x 40%) 19,200
B, Capital (480,000 x 10% x 60%) 28,800
C, Capital (480,000 x 10%) 48,000
to record the admission of C to the partnership
Requirement (b):
A B C Totals
Capital, beg. 180,000 300,000 - 480,000
Credit - - 48,000 48,000
Debit (19,200) (28,800) - (48,000)
Capital, end. 160,800 271,200 48,000 480,000
Requirement (c):
Zero – transactions with owners do not give rise to income and
expenses.
Requirement (d):
A B Total
Consideration received
(100K x 40%); (100K x 60%) 40,000 60,000 100,000
Amount debited to capital account (19,200) (28,800) (48,000)
Personal gain (loss) 20,800 31,200 52,000
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3. Solution:
Date Building 300,000
A, Capital (300,000 x 40%) 120,000
B, Capital (300,000 x 60%) 180,000
to record the revaluation of the building
Date A, Capital (780,000* x 10% x 40%) 31,200
B, Capital (780,000* x 10% x 60%) 46,800
C, Capital (780,000* x 10%) 78,000
to record the admission of C to the
partnership
4. Solutions:
Requirement (a):
Requirement (b):
A B C Totals
Capital, beg. 180,000 300,000 - 480,000
Admission of C - - 100,000 100,000
Capital, end. 180,000 300,000 100,000 580,000
Requirement (c):
A = (100% - 10% interest of C) x 40%/100% = 36%
B = (100% - 10% interest of C) x 60%/100% = 54%
C = 10%
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5. Solutions:
Requirement (a):
Requirement (b):
A B C Totals
Capital, beg. 180,000 300,000 - 480,000
Admission of C - - 70,000 70,000
Bonus to old partners 12,000 18,000 30,000
Capital, end. 192,000 318,000 70,000 580,000
6. Solution:
A, Capital 180,000
B, Capital 300,000
Total capital before revaluation 480,000
Revaluation increase 240,000
Adjusted capital 720,000
Divide by: (100% less 10% interest of C) 90%
Total capital of new partnership 800,000
Multiply by: Interest of C 10%
Investment of C 80,000
7. Solution:
8. Solution:
10. A
Solution:
Date B, Capital 120,000*
A, Capital 120,000*
to record the withdrawal of B from the
partnership