42 Chapt

er3

CHAPTER3

MULTI
PLECHOI
CEANSWERSANDSOLUTI
ONS

3-
1:c
I
mpliedcapit
alofthepart
nershi
p(P90,
000/
20%)P450,
000
Act
ualvalueofthepart
nershi
p ( 
420,
000)
Goodwil
l P 30,
000

AQUI NOLOCSINDAVI D HI ZON

Capitalbal
ancesbeforeGoodwi
ll P252, 000P126,000P42, 000 –
Goodwi l
ltooldpart
ners __ 18,000___9,
000__3,000 _ ____–
Total P270, 000P135,000P45, 000 –
PurchasebyHi zon(20%) ( 
 54,000)( 
 27,
000)( 
 9,000)_90,000
Capitalbal
ancesafteradmi
ssi
on P216, 000P108,000P36, 000P 90,000

3-
2:b
AQUI NOLOCSINDAVI D HI ZON
Capitalbal
ancesbefor
eadmissi
on P252,000P126,000P42,000 –
PurchasebyHi zon(
20%) ( 
 50,
400)( 
 25,
200)( 
 8,
400)_84,000
Capitalbal
ancesaft
eradmi
ssion P201,600P100,800P33,600P 84,000

3-
3:d
AQUINOLOCSINDAVID TOTAL
Capit
altr
ansferr
ed P 50,
400P 
25,200P 8,
400P 
84,
000
Excessdivi
dedusingpr
ofi
tandl
ossr
ati
o_ _3,
600__1,
800___
600 _ _6,
000
Cashdist
ribut
ion P 54,
000P 
27,000P 9,
000P 
90,
000

3-
4:b

Sel
li
ngpri
ce P132,000
I
nter
estsol
d(444,
000X1/
5) ( 
 88,
800)
Combinegai
n P 43,
200

3-
5:b

I
mpliedvalueoft
hepar
tner
shi
p(P40,
000/
1/4) P160,
000
Act
ualvalue ( 
140,
000)
Goodwil
l P 20,
000

BERNALCUEVAS DI AZ
Cashbalances P 80,
000P40,
000P 20,000
Goodwil
l,Profi
tandLossrati
o __12,
000__6,
000 _
_ 2,
000
Total P 92,
000P46,
000P 22,000
Capit
alTransfer(
1/4) ( 
 23,
000)
( 
11,500)
(  
 5,
500)
Capit
albalancesaft
eradmissi
on P 69,
000P34,
500P 16,500
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 43

3-
6:b
BANZONCORTEZTOTAL
Capit
alTransfer(
20%) P 
16,000P  
4,000P20,
000
Excess,Prof
itandLossr
ati
o __
6,000__4,
000 _ 10,
000
Cashdistr
ibuti
on P 
22,000P  
8,000P30,
000

3-
7:d
PEREZCADI Z TOTAL
Capit
albalancesbeginni
ng P 24,000P 48,000P 72,
000
Netprofi
t,1:
2 5,
43010, 86016,290
Drawings ( 
  
5,050)( 
  
8,000)( 
 13,
050)
Capit
albalancesbeforeadmi
ssi
on P 24,380P 50,860P 75,
240
Capit
altr
ansfer(squeeze) ( 
  
5,570)( 
 13,240)
( 18,
810)
(
1/4)
Capi
tal
bal
ancesaf
teradmi
ssi
on1:
2 P 
18,
810P 
37,
620P 
56,
430

Capit
altr
ansf
er P 
 5,
570P 13,
240P18,
810
Excess,
1:2 __
3,730_
_7,460 _11,
190
Cash P 
 9,
300P 20,
700P30,
000

3-
8:a

Totalagr
eedcapital
(P150,
000/
5/6) P180,
000
Diana'
sInt
erest 1/
6
Cashdistr
ibut
ion P 
30,
000

3-
9:a

Tot
alagreedcapi
tal
(P36,
000/
1/5) P180,
000
Tot
alcontri
but
edcapit
al(
80,
000+40,
000+36,
000)( 
156,
000)
Unr
ecognizedGoodwil
l P 24,
000

3-
10:
b Contr
ibuted Agr eed I ncrease
Capit
al Capital (
Dec.)
Oldpart
ners P110,
000P100,000(P 10,
000)
Newpar t
ner __40,
000_ _
50,
000_ 10,
000
Total P150,
000P150,000P     
  
–

Ben,capi
talbal
ancebeforeadmi ssi
on P 60,
000
Bonussharetonewpar tner(10,
000X60%) ( 
  
 6,
000)
Ben,capi
talaft
eradmission P 54,
000

3-
11:
c

Tot
alagreedcapi
tal
(P40,
000+20,
000+17,
000) P 
77,
000
Pet
e'si
nterest 1/
5
 Pet
e'sagr
eedcapi
talbal
ance P 
15,
400
44 Chapt
er3

3-
12:
b Contri
buted Agr eed I ncrease
Capit
al Capital ( Dec.
)
Oldpart
ner P  
  
65,
000P60,
000 (P  
5,000)
Newpar t
ner 25,
000(1/3)
30,
000 _5,000
Total P  
  
90,
000P90,
000P    
  
 –

FREDRAUL LORY
Capi
talbal
ancesbefor
eadmissi
on P  
  
35, 000P30,000 –
I
nvestmentbyLory –– 25,000
BonustoLory ( 
  
  
 3,500)( 
 1,
500)__5,
000
Capi
talbal
ancesaft
eradmi
ssion P  
  
31, 500P28,500P 30,
000

3-
13:
c

Totalagreedcapital
(90,
000+60,
000+70,
000) P220,000
Augusts'int
erest __
___1/4
Agreedcapital P 
55,000
Contri
butedcapital __
70,000
Bonust oJune&Jul y P 
15,000

JUNE JULY
Capi
talbal
ancesbeforeadmissi
on P90,000P 
60,000
Bonusfrom August
,equal
ly __7,
500__7,
500
Capi
talbal
ancesafteradmi
ssion P97,500P 
67,500

3-
14:
a

Total
agreedcapi
tal(
52,
000+88,
000)
/80%) P175,
000
Total
capit
alofMira&Ni
naaft
eradmi
ssion ( 
140,
000)
Cashpai
dbyEl ma P 35,
000

3-
15:
a

Tot
alagreedcapi
tal
( P41,600/
2/3) P 
62,
400
Tot
alcontri
but
edcapi t
al(P23,
000+18,
600+16,
000) (
  
57,
600)
Goodwil
ltonewpartner,Ang P 
 4,
800

LIMONG ANG
Capi
talbal
ancesbefor
eadmissi
on P23,
000P 
18,
600 –
I
nvestmentbyAng –– 16,
000
Goodwil
ltoAugust ___
__–__
___
_–__4,
800
Capi
talbal
ancesaft
eradmi
ssion P23,
000P 
18,
600P20,800
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 45

3-
16:
a

ANGBENGCHI NGDONGTOTAL
Capit
albalancesbefor
e
admission P600, 000P   
400,000P  
300,
000 –P1, 300,000
AdmissionbyDong:
ByPur chase(
1/2) (
 300,000) – –300,
000 –
ByInvestment _______–_______–____
___–_
300,000___300,
000
Capit
albalancesbefor
e
Goodwi l
landBonus P300, 000P   
400,000P  
300,
000P600,000P1,600,
000
Goodwi l
ltoOldPart
ner
s (sch.1) 150,000150,
000100,000 –
400,
000
Bonust oOldPart
ners(sch.1)__37,500__37,500__25,
000( 
100,000)_ _
_____
_–
Capit
albalancesaft
er
admission P487, 500P   
587,500P  
425,
000P500,000P2,000,
000

Schedul
e1: CC AC
I
nc.(Dec.)
OldPartners P   1,
000,
000P1,
500,
000P500,000
NewPar tner 600,
000(25%)_ _
500,
000( 
 100,
000)Bonus
Total P   1,
600,
000P2,
000,
000P400,000GW

3-
17:
b
MONALI
ZA ALMALORNATOTAL
Capit
al balancesbef ore
admi ssionofAl ma P150,
000P 
  
 50,
000 ––P 
 200,
000
Admissi onofAl ma:
Inv
est ment –– 80,
000– 80,
000
Goodwi llt ooldpar t
ner,
70:30( sch.1) _
_28,
000_
__12,
000_
___
___
–__
___
_–_
__40,
000
Capitalbal ancesbef ore
admi ssi onofLor na P178,
000P 
  
 62,
000P 
  
80,
000 –P 
 320,
000
Admissi onofLor na:
Goodwi llWr it
tenof f,
5:3:
2 (
P 20,
000)
(P 
  
 12,
000)
( 
  
 P8,
000)–(  
 P40,
000)
Inv
est ment –– –75,00075,
000
Goodwi llt ooldpar t
ners,
5:3:2( sch.2) _
_10,
000_
___
6,000_
___
4,000_
___
__– _
__20,
000
Capit
albal ancesaf t
er
admi ssion P168,
000P 
  
 56,
000P 
  76,
000P 
75,
000P 
 375,
000

Schedul
e1:
Tot
alagreedcapit
al (
80,000/ 25%) P  320,000
Tot
alcapit
alcontr
ibuted( 200,000+80,
000) ( 
 280,000)
Goodwil
ltooldpartners,70:30 P   40,
000

Schedul
e2:
Tot
alagr
eedcapi
tal
(75,
000/
20%) P 
 375,
000
 Tot
alcontri
butedcapi
tal(
280,
000+75,
000) ( 
 355,
000)
Goodwil
ltooldpart
ners,
5:3:
2 P   
20,
000

46 Chapt
er3

3-
18:
c
REDWHI TEBLUETOTAL
Unadjustedcapit
albal
ances P175,000P100, 000P 45,000P320,000
Overvaluat
ionofMarketabl
eSecur
it
ies ( 
 12,
500)( 
  
7,500)( 
  
5,000)( 
 25,
000)
Al
lowancef orBadDebts ( 
 12,
500)( 
  
7,500)( 
  
5,000)( 
 25,
000)
Adjustedcapit
albal
ancesbefor
eadmissi
on P150,000P 85,000P 35,000P270,000

Totalagr
eedcapit
al(
270,
000/
2/3) P405,
000
Green'
sinter
est 1/3
I
nv est
ment P135,
000

3-
19:
b
XXYY ZZWW TOTAL
Capitalbalancesbefore
admi ssi
on P360,
000P225,
000P135,
000 –P720,
000
Capitaltr
ansf er
toWW ( 1/6) ( 
 60,
000)( 
 37,
500)( 
 22,500)_120,
000 ____
__–
Balances P300,000P187,500P112, 500P120,
000P720,
000
Equalizat
ionofcapi t
al ( 
100,000)
__ 12,500__87,
500 _
_____–
______–
Balances P200,
000P200,
000P200, 000P120,
000P720,000
Netpr ofi
t,equall
y 3,
1503,
150 3,1503,15012,600
Drawings( 2mont hs) _(
  
 1,
500)_(
  
 2,000)
_( 
  
1,500)
_( 
  
2,000)
_(
   
7,000)
Capitalbalancesbefore
WWsI nv estment P201,
650P201,
150P201,
650P121,
150
P725,600

Totalagreedcapital
(201,
650+201,
150+201,
650)
/2/3 P906,
675
WW' sint
erest 1/3
AgreedcapitalofWW P302,
225
Contri
butedcapital(
seeabove) _121,
150
Casht obeinvested P181,
075
3-
20:
a
A BC
Capi
talbalances P 
20,750P 19,
250P 
45,000
Underst
atementofasset
s,P12,
000 __
3,000__3,
000 _ _
6,000
Bal
ancesbef oreset
tl
ementt
oA P 
23,750P 22,
250P 
51,000

Set
tl
ementtoA P 30,250
A'
sint
erest(
23,
750+5,
000) _28,750
Par
ti
alGoodwil
ltoA P  1,500
 Theref
ore:
1.Underparti
alGoodwi l
lmethodt hecapit
albal
ancesofBisP22,
250
2.UnderBonusmet hodt hecapitalbal
ancesofBwoul dbe:
B,capi
talbal
ancesbef oresettl
ementtoAP  22,
250
BonustoA( 1,500X25/75) _( 
  
  
500)
B,capi
talaft
erretir
ementofA P 21,
750
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 47

3-
21:
a
Perez 
 Rey
es 
  Suarez 
 
Capi
t albalances P 
 100,
000P  
150,
000
P 
 200,
000
Netincome, P140,000 70,
00042,000 28,
000
Under valuat
ionofinv entory,
P20,000 ___
10,000___
_ 6,
000__
__4,
000
Capi
t albalancesbef oreset t
lementt
oPer
ez P  
180,000P 
 198,
000
P 
 232,
000
Set
tlementt oPer ez ( 
 195,
000)––
Bonust oPerez ___15,
000_( 
  
 9,
000)
_( 
  
 6,
000)
Capi
t albalancesaf t
err eti
rement P     
  
  
–P  189,
000
P 
 226,
000

3-
22:
c
ELY FLORGLOR
Capitalbal
ances P  
320,
000P 
 192,
000
P 
 128,
000
Set
t l
ementtoEly ( 
 360,
000)––
TotalGoodwill(
P40,
000/50%)
P80,000 __40,
000___24,
000_
__16,
000
Capitalbal
ancesaft
err
etir
ementofEly P     
  
  
–P  
216,
000
P 
 144,
000

3-
23:
c
_Al
ma_ _Bet
ty_ _
Tot
al_
Capi
tal
bal
ance3/
1/07 480,
000 240,
000
720,
000
Netl
oss-
2007:
Sal
ary(
10mont
hs) 480,
000 240,
000
720,
000
I
nt erest(
10mont hs) 40,
000 20,000 60,
000
Bal.beg.cap.r
atio:48:
24 (544,
000) (272, 000) (816,000)
Tot al (24,000) ( 12,000) ( 36,000)
Capitalbalance 456,
000 228,000 684,000
Drawings (24,000) ( 24,000) ( 48,000)
Capitalbalance,
12/31/07 432,
000 204,000 636,
000
Netpr ofit
-2008:
Salary 576,
000 288,
000 864,
000
I
nt erest 43,
200 20,
400
63,
600
Bal
ance,
equal
l
y (397,
800) (397,
800) ( 795,
600)
Tot
al 221,
400 ( 89,400) 132,
000
 Capit
albalance 653,
400 114,
600 768,000
Drawings ( 24,
000) ( 24,
000) ( 48,000)
Capit
albalance12/
31/
08 629,
400 90,
600 720,
000

Totalcontri
butedcapital(
720,
000+400,
000)
1,
120,
000
Cora’sint
erest 40%
Cora’sagreedcapi t
al
448,
000
Cora’scontri
butedcapital 400,
000
Bonust oCora,from AlmaandBett
y4:2 48,
000
Thereforeentr
y( c)iscorr
ect
.

48 Chapt
er3

3-
24:
a
_Pet
e_ _Car
los_ _Tot
al_
Capi
talbal
ance,
beg.2007 P80,
000 P30,
000 P110,
000
2007netprof
it(
90,
000–59,000)
:
Int
erest 8,
000 3,
000
11,
000
Compensat
ion 5,
000 20,
000
25,
000
Balance,
4:6 ( 2,
000) (3,000) (5,000)
Total 11,
000 20,
000 31,
000
Bal
ance 91,
000 50,
000 141,000
Withdrawal ( 8,
000) (11,
000) (19,
000)
Repairs(char
getoPete) ( 5,
000) - (5,000)
Capitalbal
ance,
12/31/07 78,
000 39,
000 117,
000

1/1/
08:Admi ssi
onofSammy
Totalagreedcapi t
al(P117,
000+43,
000)
P160,
000
Sammy ’
sinterest 20%
Sammy ’
sagr eedcapital
32,
000
Sammy ’
scont ri
butedcapit
al 43,
000
Bonust oPete&Car l
os,4:6 11,
000
Ther
eforeentry(
a)i scorrect
.
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 49

SOLUTI
ONSTOPROBLEMS

Probl
em 3–1
a) 1. Goodwi
( l
lMethod:
Tot
alagreedcapit
al(P75,00025%) P300,
000
Tot
alcontri
butedcapit
al _275,
000
Goodwil
ltooldpart
ners,P/Lrat
io P 25,
000

Entr
y
Goodwi l
l 25,
000
Cash 75,
000
Red,capital 5,
000
White,capit
al 10,
000
Bl
ue, capi
tal 10,
000
Green,capit
al 75,
000

2. BonusMet hod:
Contri
butedcapi
talofGreen P 
75,000
Agreedcapit
alofGreen(P275,000x25%) _
68,750
Bonustooldpartners,
P/Lrati
o P  6,
250

Entr
y:
Cash 75,
000
Green,capit
al 68,
750
Red,capital 1,
250
White,capit
al 2,
500
Bl
ue, capi
tal 2,
500
b) 1. I
( mpli
citGoodwil
lMethod:
TotalImpl
iedCapit
al(
P75,
00025) P300,
000
Totalexi
sti
ngcapit
al _200,
000
I
mpl i
edGoodwillt
ooldpar
tner
s P100,
000

Entr
ies:
Goodwi l
l 100,
000
Red,capital 20,
000
Whi t
e,capit
al 40,
000
Blue,capi
tal 40,
000

Red,
capital(
25%xP80,000) 20,
000
Whit
e,capit
al(25%xp120,
000) 30,
000
Bl
ue,capi
tal(25%xP100,
000) 25,
000
Gr
een,capital 75,
000

2.Red,capi tal(25%xP10,
000) 15,
000
White, capital(
25%xP80,000) 20,
000
Bl
ue, capital (
25%xP60,
000) 15,
000
Gr een, capit
al 50,
000
50 Chapt
er3
Pr
obl
em 3–2
1)BonusMet
a. ( hod:
Contri
butedcapi
talofTomas P140,
000
Agreedcapit
alofTomas( P640,
000x20%) _128,
000
Bonust ool
dpartners,
P/Lrati
o P 12,
000

BRUNOMARI OTOMAS TOTAL

Bal
ancesbefor
eadmissi
on P200,000P300,000 –P500,
000
Admissi
onofTomas _
_ _
9,000__
_3,000_128,
000_140,
000
Bal
ancesaft
eradmi
ssion P209,000P303,000P128,
000P640,
000

2)Goodwi
( l
lMethod:
Tot
alagreedcapit
al(P140,
00020%) P700,
000
Tot
alcontri
butedcapit
al _640,
000
Goodwil
ltooldpart
ners,P/
Lrat
io P 60,
000

BRUNOMARI OTOMAS TOTAL

Bal
ancesbefor
eadmissi
on P200,
000P300,000P 
      
 –P500,000
Admissi
onofTomas __45,
000__
15,000_140,000_200,000
Bal
ancesaft
eradmi
ssion P245,
000P315,000P140,000P700,000

3)Goodwi
( l
lwi
thsubsequentwr
it
e-of
f.
BRUNOMARI OTOMAS TOTAL
Bal
ancesfr
om A-
2 P245,000P315,000P140,000P700,000
Goodwil
lwri
tt
enof
f,6:
2:2 ( 
 36,
000)( 
 12,
000)( 
 12,
000)( 
 60,
000)
Bal
ances P209,000P303,000P128,000P640,000

b. BRUNOMARI
OTOMAS TOTAL
 Bal
ancesfr
om A-
2 P245,000P315,000P140,000P700,000
Goodwil
lwri
tt
enof
f,4:
4:2 ( 
 24,
000)( 
 24,
000)( 
 12,
000)( 
 60,
000)
Bal
ances P221,000P291,000P128,000P640,000

Pr
obl
em 3–3

a. Tot
alcapital
afteradmi
ssion(P76,
000+P104,
000) P180,
000
Tot
alcapital
beforeadmissi
on(P60,
000+P80,
000) _140,
000
Goodwil
lrecorded P 40,
000

Totalcapit
alofthepart
ner
ship(
P180,
00075%) P240,
000
Less:Totalcapi
talofol
dpart
ner
splusGoodwi
l
l(P140,
000+40,
000)
_
180,000
Cashpay mentbyBar r
y P 
60,
000

b. Total
capi
tal
aft
eradmi
ssion(P52,
000+P68,
000) P120,
000
Total
capi
tal
befor
eadmissi
on _140,
000
BonustoBar
ry P 20,
000

Agreedcapit
alofBar
ry(
P120,
00075%)x25% P 40,
000
Less:Bonus __20,
000
Cashpay mentbyBar
ry P 20,
000
Par
tnershi
pDissol
uti
on–ChangesinOwner
shi
p 51

Pr
obl
em 3–4

a. Tot
alagreedcapit
al(P60,00020%) P300,
000
Tot
alcontri
butedcapit
al(P100,
000+P40,
000+P60,
000) _200,
000
Goodwil
ltooldpart
ners,P/Lrat
io P100,
000

Ent
ry:
Cash 60,
000
Goodwill 100,
000
Gene,capit
al 80,
000
Nancy,capit
al 20,
000
El
len,capi
tal 60,
000

b. Cash 60,
000
El
l
en,
capi
tal 60,
000

NoGoodwil
l
,nobonusbecauset
het
otal
agr
eedcapi
tal
isequal
tot
het
otal
cont
ri
but
edcapi
tal
.

c. Gene,capit
al 20,
000
Nancy,capit
al 8,
000
El
l
en, capi
tal 28,
000

d. Cash 32,
000
El
l
en,
capi
tal 32,
000

Si
ncet
het
otal
agr
eedcapi
tal
(P172,
000)i
sequal
tot
het
otal
cont
ri
but
edcapi
tal
 (
P172,
000)
,thennoGoodwi
l
lorbonusi
stober
ecor
ded.

e. Tot
alagreedcapi
tal
( P140,
00080%) P175,000
Tot
alcontri
but
edcapi t
al(
P140,
000+P32,
000) _172,000
Goodwil
ltonewpartner P   
3,000

Ent
ry:
Cash 32,
000
Goodwil
l 3,
000
El
l
en,capi
tal 35,
000

Pr
obl
em 3–5

a. Cash 40,
000
Cher
rycapi
tal 40,
000

b. Total
agreedcapital
(P120,
000+P50,
000) P170,000
Cherr
y'si
nterest __
__25%
Cherr
y'sagreedcapi
tal 42,500
Contr
ibutedcapi
tal __50,000
Bonustooldpartner
s,70:
30 P   
7,500
52 Chapt
er3

Ent
ry:
Cash 50,
000
Cherry
, capi
tal 42,
500
Helen,capit
al 5,
250
Cathy,capit
al 2,
250

c. Totalagreedcapi tal(
P120,
000+P25,
000) P145,
000
Cherry'
sinterest __
__25%
Agreedcapi t
al ofCherry 36,
250
Contri
butedcapi tal __25,
000
Bonust onewpar tner P 11,
250

Ent
ry:
Cash 25,
000
Helen,
capit
al 7,
875
Cathy,
capit
al 3,
375
Cherr
y,capi
tal 36,
250

d. Tot
alagreedcapit
al(P50,00025%) P200,
000
Tot
alcontri
butedcapit
al(P120,
000+50,
000) 170,
000
Goodwil
ltooldpart
ners,70:30 P 30,
000

Ent
ry:
Cash 50,
000
Goodwil
l 30,
000
Cher
ry,
capi
tal 50,
000
 Hel
en,
capi
tal 21,
000
Cat
hy,
capi
tal 9,
000

e. Tot
alagreedcapi
tal
( P120,
00075%) P160,
000
Tot
alcontri
but
edcapi t
al(
P120,
000+P25,
000) _145,
000
Goodwil
ltonewpartner P 15,
000

Ent
ry:
Cash 25,
000
Goodwil
l 15,
000
Cher
ry,
capi
tal 40,
000

Pr
obl
em 3–6

a. Totalagreedcapit
al(P600,
0003/
4) P800,
000
Santosinterest _
____
1/4
Contri
butionofSantos P200,
000

b. Totalagr
eedcapit
al(P630,
0003/
4) P840,
000
Santos'i
nter
est _
____
1/4
Contri
buti
onofSantos P210,
000
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 53

c. Total
agreedcapit
al(
P624,0003/
4) P832,
000
Less:Cont
ri
butedcapi
tal
ofoldpar
tner
s _600,
000
Cont
ri
but
edcapi
tal
ofSant
os P232,
000

d. Total
agreedcapi
tal
(P600,
0003/
4) P800,
000
Less:Goodwi
ll __10,
000
Cont
ri
but
edcapi
tal 790,
000
Cont
ri
but
edcapi
tal
ofol
dpar
tner
s _
600,
000
Cont
ri
but
edcapi
tal
ofSant
os P190,
000

e. Total
agreedcapit
al(
Contri
but
ed) P820,
000
Less:Cont
ri
butedcapi
tal
ofoldpar
tner
s _600,
000
Cont
ri
but
edcapi
tal
ofSant
os P220,
000
Pr
obl
em 3–7
a. Tony
,capi
tal 40,
000
Noel,
capi
tal 40,
000

b. Cash 90,
000
Noel
,capi
tal 90,
000
(P180,
0002/3)x1/
3=P90,
000.

c. Cash 56,
000
Goodwi
ll 4,
000
Noel
,capi
tal 60,
000

Tot
alagreedcapi
tal
(P180,
0003/4) P240,
000
Tot
alcontri
but
edcapit
al(
P180,
000+P56,
000) _236,
000
 Goodwi
l
ltonewpar
tner P 
 4,
000

d. Subas,capit
al……………………………………………………………… 14,
400
Tony,
capital
………………………………………………………………… 9,
600
I
nventory………………………………………………………………
24,
000

Cash 52,
000
Noel,capi
tal 52,
000
Totalagreedcapit
al(P52,
0001/4) P208,000
Totalcapit
albefor
einvent
orywr
it
e-down(
180,
000+52,
000) (
232,000)
Wr i
te-downt ooldpar t
nerscapit
al (
 24,
000)
e. Land………………………………………………………………………………………. .92,
000
Subas, capital…………………………………………………………………… 55,
200
Tony ,capit
al……………………………………………………………………. 36,
800
Subas, capit
al (
P155, 200x1/ 4) 38,
800
Tony ,capi
tal (
P116, 800x1/ 4) 29,
200
Noel ,
capi t
al 68,
000
Totalresulti
ngcapi tal(P68,
0001/ 4) P272,
000
Totalcapitalofol dpar t
ner(netassets) _180,
000
Incr
easei nv al
ueofl and P 92,
000
Capitalofoldpar tnerafterr
ev al
uati
onofland:
Subas( P100, 000+P55, 200) P155,
200
Tony( P80,000+P36, 800) 116,
800
54 Chapt
er3

f
. Cash 40,
000
Subas,capit
al 2,
400
Tony,capit
al 1,
600
Noel,capi
tal 44,
000

Agreedcapi
tal
ofNoel(P220,
000x1/
5) P 
44,000
Contri
but
edcapit
alofNoel _
40,000
BonustoNoel P  4,
000

g. Cash P60,
000
Goodwill 60,
000
Noel,capi
tal P 
60,
000
Subas,capit
al(P60,
000x3/5) 36,
000
Tony,capi
tal(P60,
000x2/5) 24,
000

Tot
alagreedcapit
al(P60,
0001/5) P300,
000
Tot
alcontri
butedcapit
al(
P180,
000+P60,
000) _240,
000
Goodwil
ltooldpart
ner,3:
2 P 60,
000

Pr
obl
em 3–8

a. Conny,capit
al 40,
000
Andy,capit
al(P8,
000x3/4) 6,
000
Benny,capi
tal(P8,
000x1/4) 2,
000
Cash 48,
000
b. Goodwill 10,
000
Conny,capi
tal 40,
000
Cash 50,
000

c. Goodwill(
P5,0001/5) 25,
000
Conny,capit
al 40,
000
Andy,capit
al(
P25,000x3/5) 15,
000
Benny,capi
tal
(P25,000x1/5) 5,
000
Cash 45,
000

Pr
obl
em 3–9

a. Spade,capit
al 120,
000
Jack,capi
tal 120,
000

b. Goodwill(
P30,00050%) 60,
000
Ace,capit
al 12,
000
Jack,capi
tal 18,
000
Spade,capit
al 30,
000

Spade,capit
al(P120,
000+P30,
000) 150,
000
Jack,capi
tal 150,
000
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 55

Pr
obl
em 3-
9(Cont
inued)

c. Spade,capi
tal 180,
000
Cash 180,
000

Ace,capit
al(P60,000x2/5) 24,
000
Jack,capi
tal(P60,000x3/5) 36,
000
Spade,capital 60,
000

d. Land 20,
000
Ace,capit
al(20%) 4,
000
Jack,capi
tal(30%) 6,
000
Spade,capit
al (
50%) 10,
000

Spade,capit
al 130,
000
Ace,capit
al(P50,000x.40) 20,
000
Jack,capi
tal(P50,000x.60) 30,
000
Cash 60,
000
Land 120,
000

e. Goodwill 30,
000
Spade,capi
tal 120,
000
Cash 150,
000
f
. Goodwill(
P30,00050%) 60,
000
Spade,capit
al 120,
000
Ace,capit
al(P60,000x20%) 12,
000
Jack,capi
tal(P60,000x30%) 18,
000
Cash 150,
000

g. Land P40,
000
Ace,capit
al(20%) 8,
000
Jack,capi
tal(30%) 12,
000
Spade,capit
al (
50%) 20,
000

Spade,capit
al (
P120,000xP20,
000) 140,
000
Ace,capit
al(P10,000x40%) 4,
000
Jack,capi
tal(P10,000x60%) 6,
000
Land 100,
000
Notepay abl
e 50,
000

56 Chapt
er3

Pr
obl
em 3–10

Case1:BonusofP10, 000toEddy
:
Eddy,capi
tal 70,
000
Charl
y,capit
al (
P10,
000x3/5) 6,
000
Danny,capit
al(P10,
000x2/5) 4,
000
Cash
80,
000

Case2:Part
ialGoodwil
ltoEddy
:
Goodwill 4,
000
Eddy,capi
tal 70,
000
Cash
74,
000

Case3:BonusofP5, 000toremai
ningpar
tner
:
Eddy,capit
al 70,
000
Charly
,capit
al(P5,
000x3/5) 3,
000
Danny,capit
al(P5,
000x2/5) 2,
000
Cash
65,
000

Case4:TotalI
mpliedGoodwi
l
lofP24,
000:
Goodwill 24,
000
Eddy,capi
tal 70,
000
 Charl
y,capi
tal(
P24,
000x3/
6) 12,
000
Danny,capi
tal
(P24,
000x2/
6) 8,
000
Cash
74,
000

Case5:Otherasset sdi
sbursed:
Eddy ,capit
al 70,
000
Otherasset s 20,
000
Charly
,capi
tal(
P60,000x3/
6) 30,
000
Danny,capi
tal(
P60,000x2/
6) 20,
000
Cash
40,000

Case6:DannypurchasesEddy
'scapi
tali
nter
est
:
Eddy,capi
tal 70,
000
Danny,capi
tal 70,
000

Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 57

Pr
obl
em 3–11

a.1/
1/06 Bui
ldi
ng 52,
000
Equi
pment 16,
000
Cash 12,
000
Santoscapi
tal 40,
000
Torecordini
ti
ali
nvest
ment
.

12/
31/
06 Reyescapit
al 22,
000
Santoscapi
tal 12,
000
Incomesummar y 10,
000
Tor
ecorddist
ri
buti
onofl
ossasf
oll
ows:
  Sant
os Rey
es
Tot
al
I
nter
est P 
8,000 P 
  
  
 – P 8,000
Addi
ti
onalpr
ofi
t 4,000 4,000
Bal
ancetoReyes _
__ _
__ (
22,
000) (
22,000)
Tot
al P12,
000 P(
22,
000)
(
P10,
000)
 1/
1/07 Cash 15,
000
Santoscapi
tal
(15%) 300
Reyescapit
al(
85%) 1,
700
Cruzcapi
tal 17,
000
(new i
nvestmentbyCr uzbringstot
alcapit
altoP85,000after2006l oss
[
80,000–10, 000+15, 000]
.Cruz'
s20% int
eresti
sP17,000[85,
000x20%]
withtheextraP2, 000comingf r
om t het
wo origi
nalpar
tners[al
located
betweenthem accordi
ngtothei
rprof
itandl
ossrat
io]
.)

12/
31/
07 Sant
oscapi
tal
10,
340
Rey
escapi
tal
5,
000
Cr
uzcapi
tal
5,
000
Sant
osdr
awi
ngs
10,
340
Rey
esdr
awi
ngs
5,
000
Cr
uzdr
awi
ngs
5,
000
Toclosedrawingsaccountsfortheyearbasedondist
ri
but
ing20%.Ofeach
par
tner'
sbeginni
ngcapitalbal
ances[aft
eradjust
mentf
orCruz'
sinv
est
ment]
orP5,000whicheveri
sgr eat
er.Sant
os'
scapitalI
sP51,
700[40,
000+12,000
–300].)

12/
31/
07 I ncomesummar y
44,
000
Sant
oscapi
tal
16,
940
Rey
escapi
tal
16,
236
Cr
uzcapi
tal
10,824
Toall
ocateP44,
000i
ncomef
igur
eascomput
edbel ow:
Santos Reyes Cr
uz
I
nter
est(20%ofP51,
700) P10,340
15%ofP44,000i
ncome 6,600
Bal
ance,60:
40 _
__ __
_ P16,236 P10,
824
Tot
al
P16,
940P16,
236P10,
824
58 Chapt
er3

Capi
tal
bal
ancesasofDecember31,
2008
Santos  Rey es   Cr
uz 
I
niti
alinvestment
,2007 P40,000P40,000
2007pr ofi
t 12,000(22,
000)
Cruzinvestment (300)(1,
700)P17,000
2007dr awings (
10,340)(5,
000)(5,
000)
 2007pr
ofi
t _
16,
940_
16,
236_
10,
824
Capi
tal
,12/
31/
07 P58,
300P27,
536P22,
824

1/
1/08 Cr
uzcapital 22,
824
Diazcapital 22,
824
Totr
ansfercapit
alpur
chasef
rom Cr
uzt
oDi
az

12/
31/
08 Sant oscapital 11,660
Reyescapital 5,507
Diazcapit
al 5,000
Santosdrawings 11,660
Reyesdrawings 5,507
Diazdrawings 5,000
Toclosedr awingsaccount
sbasedon20% ofbegi
nningcapi
talBal
ances
(above)orP5,0000(whi
cheveri
sgr
eat
er)
.

12/
31/
08 I
ncomesummar y 61,
000
Santoscapital 20,
810
Reyescapital 24,
114
Diazcapit
al 16,
076
Todistri
buteprofi
tfor2008comput
edasf
oll
ows:
Sant
os 
Reyes Diaz 
 
I
nter
est( 20%ofP58, 300) P11,
660
15%ofP61, 000pr ofi
t 9,
150
Bal
ance, P40,
190, 60:
40 ___
___
P24,114P16,
076
Total P20,
810P24,
114
P16,076

1/
1/09 Diazcapi
tal 33,
900
Santoscapit
al (
15%) 509
Reyescapit
al(85%) 2,
881
Cash 37,
290
Diazcapi
tali
s[ 33,
900(P22,
824–P5,000+P16, 076)]
.Extr
a10%i
sdeduct
ed
fr
om thetwor emaini
ngpart
ners'
capi
talaccounts.

b.1/
1/06 Bui
ldi
ng 52,
000
Equi
pment 16,
000
Cash 12,
000
Goodwill 80,
000
Santoscapi
tal 80,
000
Reyescapit
al 80,
000
Torecordini
ti
alinvest
ments.Rey
esi
scr
edi
tedwi
thgoodwi
l
lofP80,
000t
o
matchSantosinvestment
.
Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 59

12/
31/
06 Reyescapit
al 30,
000
Santoscapi
tal 20,
000
Incomesummar y 10,
000
I
nterestofP16,
000iscredi
tedt
oSant
os(
P80,
000x20%)alongwi
thabase
 ofP4,000.Theremai
ningpr
ofi
tisnow aP30,
000l
osswhi
chi
sat
tri
but
ed
ent
ir
elytoReyes.

1/
1/07 Cash 15,
000
Goodwill 22,
500
Cruzcapi
tal 37,
500
Cashandgoodwi l
lcont
ri
but
edbyCr
uzar
erecor
ded.Goodwil
lisComput
ed
al
gebraical
l
yasfoll
ows:

P15,000+goodwi
l
l= 20% (
cur
rentcapi
tal+P15,
000
+goodwi l
l)
P15,000+goodwi
l
l= 20% (
P150,
000 + P15,
000 +
goodwill
)
P15,000+goodwi
l
l= P33,
000+.
20goodwi
l
l
.
80goodwi ll =P18,
000
goodwill =P22,
500

12/
31/
07 Sant oscapi t
al 20,
000
Reyescapi t
al 10,
000
Cruzcapi tal 7,
500
Sant osdr awings 20,
000
Rey esdr awings 10,
000
Cruzdr awings 7,
500
Toclosedr awingsaccountsbasedon20%ofbegi
nni
ngcapital
Balances:Sant os,p100,
000;Reyes,
P50,
000;
andCruz,P37,
500.

12/
31/
07 I
ncomesummar y 44,
000
Santoscapit
al 26,
600
Reyescapit
al 10,
400
Cruzcapit
al 6,
960
Toal
l
ocateP44,000pr
ofi
tasf
oll
ows:
Sant
os 
Reyes Cruz 
I
nter
est(
20%ofP100,000) P20,
000
15%ofP44,
000prof
it 6,
600
Bal
anceofP17,
400,
60:40 ___
___
P10,440P 
6,960
Tot
al P26,
600P10,
440
P 
6,960

Capi
tal
bal
ancesasofDecember31,
2004:
Sant os 
Reyes Cruz 
I
nit
ialinvestment,2006 P80, 000P80,000
2006pr ofi
tall
ocation 20,000(30,
000)
Addit
ional i
nvestment P37,500
2007dr awings (20,000)(10,
000)(
7,500)
2007profital
locati
on _
_ 26,600_10,
440__6,960
Capi
tal
s,12/
31/
07 P106,
600P50,
440P36,
960
60 Chapt
er3

1/
1/08 Goodwil
l 26,
588
Santoscapi
tal 3,
988
 Reyescapit
al 13,560
Cruzcapit
al 9,040
Tor ecordgoodwi l
limpli
edofCr uz'sinterest.Ineff
ect,thepr of
itSharingratiois
15%t oSantos,51%t oRey es(60%of85%r emaini
ng afterSantos'sincome) ,and
34% toCr uz( 40% ofthe85% r emai ningaf terSantos'income) .Diazispay i
ng
P46,000,P9,040inexcessofCr uz'
scapi t
al( P36,
960).Theaddi t
ionalpay mentfor
thi
s34%i ncomeI nter
estindi
cat
est otalgoodwi l
lofP26,588(P9,040/34%) .

1/
1/08 Cr
uzcapit
al 46,
000
Di
azcapi
tal 46,
000
Totr
ansf
erofcapi
talpur
chase.

12/
31/
08Santoscapital 22,118
Reyescapi t
al 12,800
Diazcapital 9,
200
Santosdrawings 22,118
Reyesdrawings 12,800
Diazdrawings 9,
200
Toclosedr awingsaccount
sbasedon20%ofbegi
nni
ngcapi
tals.

12/
31/
08I
ncomesummar y 61,
000
Santoscapital 31,
268
Reyescapital 12,
800
Diazcapit
al 9,
200
Toal
locateprofi
tfor2008asf
oll
ows:
Sant
os 
Reyes  Diaz  
I
nter
est(
20%ofP110,588) P22,
118
15%ofP61,
000 9,
150
Bal
anceofP29,
732,
60:40 ___
___
P17,839P11,893
Tot
als P31,
268P17,
839P11,
893

Capi
tal
bal
ancesasofDecember31,
2008:
Sant os 
Rey es  Diaz 
 
12/31/07bal ances P106,600P50, 440
Goodwi l
l 3,98813,560
Capit
al purchased P46, 000
Drawings (
22,118)(12,800)(
9,200)
Profi
tallocati
on __31,268_17,839_11,893
12/
31/
08bal
ances P119,
738P69,
039P48,
693

1/1/09 Goodwi ll 14,

321
Sant oscapital 2,
148
Rey escapi t
al 7,
304
Diazcapi tal 4,
869
Tor ecordi mpliedgoodwill
.Diazwil
lbepaidP53,
562( 110%oft hecapi t
albalance
forhisint er
est.Thisamounti sP4,
869inexcessofthecapitalaccount.SinceDiaz
i
sonl yent i
tl
edt oa34% shar eofprofi
tsandlosses,theadditi
onalP4, 869must
i
ndicat ethatt hepartner
shipasawhol eisunderval
uedbyP14, 321( P4,869/34%)
whichi streatedasgoodwi l
l.
1/1/09 Diazcapi tal 53,
562
Cash 53,
562
Torecor dset tl
ementtoDiaz.
Par
tnershi
pDi
ssol uti
on–Changesi nOwnershi
p 61

Pr
obl
em 3–12
Par
tner
shi
pBooksCont
inuedasBooksofCor
por
ati
on

Ent
ri
esi
ntheBooksoft
heCor
por
ati
on

1)I
( nv
entor i
es 26,
000
Land 40,
000
Buil
ding 20,
000
Accumul ateddepreciati
on–bl dg. 20,
000
Accumul ateddepreciati
on–equi pment 30,
000
Equi pment 20,
000
Jackcapi tal 58,
000
Jillcapit
al 34,
800
Juncapi tal 23,
200
Toadj ustassetsandl i
abil
i
tiesofthepar
tner
shi
p
totheircurrentfai
rvalues.

2)Cash
( 4,
000
Jackcapital 18,
000
Ji
llcapi
tal 20,
200
Juncapital 1,
800
Toadjustcapitalaccount
soft
hepar
tner
sto4:
3:3r
ati
o.

3)Jackcapi
( tal 100,
000
Ji
llcapi
tal 75,
000
Juncapital 75,
000
Capitalst
ock 250,
000
Torecordissuanceofst
ockt
othepar
tner
s.

NewBooksOpenedf
ort
heNewCor
por
ati
on

Ent
ri
esi
ntheBooksoft
hePar
tner
shi
p

1)I
( nv
entor i
es 26,
000
Land 40,
000
Buil
ding 20,
000
Accumul ateddepreci
ati
on–bl dg. 20,
000
Accumul ateddepreci
ati
on–equi pment 30,
000
Equi pment 20,
000
Jackcapi tal 58,
000
Jillcapi
tal 34,
800
Juncapi tal 23,
200
Toadj ustassetsandli
abil
i
tiesofthepar
tner
shi
p.

2)Cash
( 4,
000
Jackcapital 18,
000
Ji
llcapi
tal 20,
200
Juncapital 1,
800
Toadjustcapitalaccount
soft
hepar
tner
s.
62 Chapt
er3

3)St
( ockofJJJCor
por
ati
on 250,
000
 Accountspay abl
e 30,
000
Loanspay able–Ji ll 40,
000
Cashi nbank 44,
000
Account spay abl
e 26,
000
Inv
ent ories 60,
000
Land 60,
000
Buil
ding 70,
000
Equipment 60,
000
Torecordt ransferofasset
sandli
abil
it
iesto
Thecorpor ati
onandt herecei
ptofcapi
talst
ock

4)Jackcapi
( tal 100,
000
Ji
llcapi
tal 75,
000
Juncapital 75,
000
StockofJJJCorporat
ion 250,
000
Torecordissuanceofst
ocktothepar
tner
s.

Ent
ri
esi
ntheBooksoft
heCor
por
ati
on

(
1)Tor
ecor
dtheacqui
sit
ionofasset
sandl
i
abi
l
iti
esf
rom t
hepar
tner
shi
p:

Cashi nbank 44,

000
Accountsr ecei
v abl
e 26,
000
Inv
entories 60,
000
Land 60,
000
Buil
ding( net) 70,
000
Equipment( net) 60,
000
Account spay abl
e 30,
000
Loanspay able 40,
000
Capi talstock 250,
000

Pr
obl
em 3–13
a.1/
1/06 Bui
ldi
ng 1,
040,
000
Equi
pment 320,
000
Cash 240,
000
Li
m,capi
tal
800,
000
Sy
,capi
tal
800,
000
(Torecordini
ti
alinvest
ment
.Asset
srecor
dedatmar
ketv
aluewi
tht
wo
equalcapit
albalances.

12/31/
06 Sy,capi
tal 440,000
Lim,capi
tal
240,000
Incomesummar y
200,000
(Theall
ocati
onplanspeci
fi
esthatLi
m wil
lreceiv
e20%i ni nt
erest[
or
160,000basedonP800,000capit
albal
ance]plusP80,000mor e[si
nce
 t
hatamounti
s

Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 63

gr
eat
ert
han15%oft
hepr
ofi
tsf
rom t
heper
iod]
.Ther
emai
ningP440,
000
l
ossi
sassi
gnedt
oSy.
)

1/
1/07 Cash 300,
000
Li
m, capi
tal(
15%) 6,
000
Sy,capi
tal(
85%) 34,
000
Tan,capi
tal
340,
000
(Newinvest
mentbyTanbringstot
alcapit
alt
oP1, 700,000aft
er2006loss
[
P1,600,
000–P200,000+P300,000].Tan’
s20%i nteresti
sP340,000
[
P1,700,
000x20%]withtheextr
aP40,000comingf rom thetwoorigi
nal
part
ners[al
l
ocat
edbetweenthem accordi
ngtotheirprofi
tandlossrati
o].
)

12/31/
07 Lim, capit
al 206,
800
Sy,capi t
al 100,
000
Tan, capit
al 100,
000
Lim,drawings
206,800
Sy,drawings
100,000
Tan,drawings
100,000
(Tocl oseoutdrawingsaccount sfortheyearbasedondist
ri
buti
ng20%of
eachpar tner
’sbeginni
ngcapi t
albalances[aft
eradj
ustmentforTan’
s
i
nv estment]orP100,000whi cheverisgreat
er.Li
m’scapi
tali
sP1,034,
000
[P800,000+P240, 000–P6, 000])

12/31/
07 I
ncomesummar y 880,
000
Li
m, capit
al
338,800
Sy,capi
tal
324,720
Tan,capit
al
216,480
(
Toall
ocateP880,000i
ncomef
igur
efor2007asdet
ermi
nedbel
ow.
)

Li
m Sy Tan
I
nterest(
20%ofP1,034,000
beginni
ngcapit
albal
ance) P206,
800
15%ofP880, 000i
ncome 132,
000
60:
40spl i
tofremai
ningP541,200i
ncome - 324,
720
216,480
Total P338,
800 P524,
720 P216,
480

Capi
tal
bal
ancesasofDecember31,
2007:
Li
m Sy Tan
I
nit
ial
2006i
nvest
ment P800,
000 P800,
000
2006pr ofi
tallocat
ion 240,
000 440,
000
Tan’si
nv estment (6,
000) (
34,
000) P340, 000
2007dr awings (206,
800) (100,
000)
(100,
000)
2007pr ofi
tallocat
ion 338,
800 324,
720 216,
480
12/31/07bal ances P1,
166,
000 P550,
720 P456,
480

1/
1/08 Tan,
capi
tal 456,
480
Ang,capi
tal
456,
480
(
Tor
ecl
assi
fybal
ancet
oref
lectacqui
sit
ionofTan’
sint
erest
.)

64 Chapt
er3

12/31/
08 Lim,capit
al 233,
200
Sy,capit
al 110,
140
Ang,capital 100,
000
Lim, drawings
233,200
Sy, drawings
110,140
Ang, drawings
100,000
(Tocloseoutdr awingsaccount
sfort
heyearbasedon20%ofbegi
nni
ng
capit
albalances[ abov
e]orP100,
000[whi
cheveri
sgreat
er]
.)

12/31/08 I ncomesummar y 1,
220,
000
Li
m, capit
al
416,200
Sy,capi
tal
482,280
Ang,capit
al
321,520
(Toall
ocat
epr ofi
tfor2008determi
nedasf
oll
ows)
Li
m Sy Ang
I
nterest(20%ofP1, 166,
000beg.capital
) P233, 200
15%ofP1, 220,
000income 183,
000
60:
40spl itofremaini
ngP803,800 - 482,
280 321,
520
Tot als P416,
200 P482,
280 P321,
520

1/
1/09 Ang,capit
al 678,
000
Li
m, capi
tal(15%) 10,
180
Sy,capi
tal85%) 57,
620
Cash
745,
800
(Ang’
scapi
tal
isP678,
000[P456,
480–P100,000+P321,520]
.Extr
a10%
paymenti
sdeduct
edfrom t
hetworemai
ningpart
ner
s’capit
alaccount
s.)

b. 1/
1/06 Bui
ldi
ng 1,
040,
000
Equi
pment 320,
000
Cash 240,
000
 Goodwi
ll 1,
600,
000
Li
m,capi
tal
1,
600,
000
Sy
,capi
tal
1,
600,
000
(Torecor
dini
ti
alcapi
tali
nvestment
s.Syiscr
edi
tedwi
thgoodwi
l
lof
P1,600,
000tomatchLim’sinv
estment.
)

12/31/
06 Sy,capital 600,000
Lim,capit
al
400,000
Incomesummar y
200,000
(I
nterestofP320, 000i
scredi
tedt
oLim[P1,
600,
000x20%]al ongwitha
baseofP80, 000.Theremaini
ngamounti
snowaP600, 000lossthati
s
att
ributedentir
elytoSy.
)

1/
1/07 Cash 300,
000
Goodwi
ll 450,
000
Tan,
capi
tal
750,
000
(Cashandgoodwil
lbeingcont
ri
but
edbyTanar
erecor
ded.Goodwi
l
lmust
becalcul
atedal
gebr
aical
ly.
)

Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 65

P300,
000+Goodwil
l = 20%(
Cur
rentcapit
al+P300,000+Goodwil
l
)
P300,
000+Goodwil
l = 20%(
P3,
000,000+P300,000+Goodwil
l)
P300,
000+Goodwil
l =P660,000+.
2Goodwi l
l
.
8Goodwill=P360,000
Goodwi
l
l=P450,000

12/31/
07 Lim,capit
al 400,
000
Sy,capit
al 200,
000
Tan,capit
al 150,
000
Lim, drawings
400,000
Sy,dr awings
200,000
Tan, drawings
150,000
(Tocloseoutdr awingsaccountsf
ortheyearbasedon20%ofbeginning
capit
albalances: Li
m-P2,000,
000,Sy
-P100,000,andTan-P750,
000.
)

12/31/
07 I
ncomesummar y 880,
000
Li
m, capit
al
532,000
Sy,capi
tal
208,800
Tan,capit
al
139,200
 (
Toal
l
ocat
eP880,
000i
ncomef
igur
easf
oll
ows)

Li
m Sy Tan
I
nter
est(
20%ofP2,000,000)
beginni
ngcapit
albal
ance) P400,
000
15%ofP880,000i
ncome 132,
000
60:
40spl
itofremai
ningP348,000 - P208,
800 P139,
200
Totals P532,
000 P208,
800 P139,
200

Capi
tal
bal
ancesasofDecember31,
2007:
Lim Sy Tan
I
niti
al2006i nvestment P1,
600,
000 P1,600,000
2006pr ofi
tallocat
ion 400,
000 (
600,
000)
Addit
ionalinvestment P750,
000
2007dr awings (
400,
000) (200,000)
(150,
000)
2007pr ofi
tallocat
ion 532,
000 208,
800 139,
200
12/31/07bal ances P2,
132,
000 P1,
008,
800 P739,
200

1/
1/08 Goodwi
ll 531,
760
Li
m,capi
tal
(15%)
79,
760
Sy
,capi
tal
(51%)
271,
200
Tan,
capi
tal
(34%)
180,
800
(
Tor
ecor
dgoodwi
l
lindi
cat
edbypur
chaseofTan’
sint
erest
.)

Ineffect
,profi
tsareshared15%toLi m,51%t oSy–(60%oft he85%r emai ningafter
Lim’sincome),and34%t oTan(50%oft he85%r emaini
ngaf t
erLim’sincome) .Angis
payingP920,000,anamountP180, 800inexcessofTan’scapit
al(P739,200).The
additi
onalpaymentforthis34%incomei nter
esti
ndi
catestotalgoodwillofP531,760
(P180,800/34%).Si
nceTani s
enti
tledto34%oft heprofi
tsbutonlyholds19%ofthetotalcapit
al,
ani mpliedvaluefor
the

66 Chapt
er3

companyasawholecannotbedeter
mineddi
rect
lyfr
om thepaymentofP920,
000.Thus,
goodwi
llcanonl
ybecomputedbasedontheexcesspay
ment .

1/
1/08 Tan,
capi
tal 920,
000
Ang,capi
tal
920,
000
(
Tor
ecl
assi
fycapi
tal
bal
ancet
onewpar
tner
.)

12/31/08 Li
m, capi
tal 442,
360
Sy,capi
tal 256,
000
Ang,capit
al 184,
000
Lim,dr
awi
ngs
442,360
 Sy
,dr
awi
ngs
256,
000
Ang,
drawi
ngs
184,
000
(Tocloseoutdr
awingsaccount
sfortheyearbasedon20%ofbegi
nni
ng
capi
talbal
ances[af
teradj
ust
mentforgoodwill
].
)

12/31/08 I ncomesummar y 1,
220,
000
Lim,capi t
al
625,360
Sy,capital
356,
780
Ang,capi t
al
237,
860
Toal locateprof i
tfor2008asfol
lows:
Lim Sy Ang
I
nter
est(20%ofP2, 211, 760
beginningcapi talbalance) P442,360
15%ofP1, 220,
000i ncome 183,000
60:
40splitofremaini ngP594, 640 - 356,
780 237,
860
Totals P625,360 P356,
780 P237,
860

Capi
tal
bal
ancesasofDecember31,
2008:
Li
m Sy Ang
12/31/07bal
ances P2,
132,000 P1,008,
00 P739, 200
Adjustmentf
orgoodwi
l
l 79,760 271,200 180,
800
Drawings (
442,360) (256, 000) ( 184,
000)
Profi
tall
ocat
ion 625,
360 356,
780
237,
860
12/31/08bal
ances P2,
394,
760 P1,
380,
780 P973,
860

Angwill
bepaidP1,071,
240(110%oft hecapi t
albal
ance)f orherint
erest.Thi
samountis
P97,
380inexcessofthecapit
alaccount.SinceAngi sonlyenti
tl
edt oa34%shar eof
prof
it
sandlosses,
theaddit
ionalP97,
380musti ndi
catethatthepartnershipasawhole
i
sunderval
uedbyP286,420(P97,380/34%).Onlyinthatcir
cumst ancewoul dtheext
ra
paymenttoAngbejusti
fi
ed:

1/
1/09 Goodwi
ll 286,
420
Li
m,capi
tal
(15%)
42,
960
Sy
,capi
tal
(51%)
146,
080
Ang,
capi
tal
(34%)
97,
380
(
Tor
ecogni
zei
mpl
i
edgoodwi
l
l.
)

Par
tner
shi
pDi
ssol
uti
on–Changesi
nOwner
shi
p 67

1/
1/09 Ang,
capi
tal 1,
071,
240
Cash
1,
071,
240
(
Tor
ecor
dfi
nal
dist
ri
but
iont
oAng.