Q1 (exam 2010 q5)

At april 30, partners’ capital balances in NTW company are :

A. Nolan 62,000, T. Tritt 36,000 , and T. Wuhom 12,000. The income sharing ratios
are : 5 : 4 : 1, respectively. On may 1 the NTWO company is formed by admitting
M. Otton to the firm as a partner.

Required
a) Journalize the admission of Otton under each of the following independent
assumptions
1. Otton purchases 50% of Wuhon’s ownership interest by paying Wubon 16,000 in
cash.
2. Otton purchases 33 1/3% of Tritt’s ownership interest by paying Tritt 15,000 in cash
3. Otton invests 70,000 for a 30% ownership interest , and bonuses are give to the old
partners.
4. Otton invests 40,000 for a 30% ownership interest, which includes a bonus to the
new partners

b) Tritt’s capital balance is 30,000 after admitting Otton to the partnership by investment
If Tritt’s ownership interest is 20% of total partnership capital , what were.
1) Otton’s cash investment 2) the bonus to the new partner ?

Q2 (exam 2011 q3)

At april 30, partners’ capital balances in ELM company are :

Easi 49,000 , Lester 24,000, and Matt 22,000. The income –sharing are : 5 : 3 : 2,
respectively. On may 1, the ELM company is formed by admitting Ortiz to the firm as a
partner.
Required
a) Journalize the admission of Ortiz under each the following independent assumptions.

1. Ortiz purchase 50% of Matt’s ownership interest by paying Matt 9,000 in cash.
2. Ortiz purchase 50% of Lester’s ownership interest by paying Lester 16,000 in
cash.
3. Ortiz invests 35,000 cash in the partnership for a 40% ownership interest that
includes a bonus to the new partner.
.

4. Ortiz invests 30,000 in the partnership for a 15% ownership interest , and
bonuses are given to the old partners.
.

b) Matt’s capital balance is 24,000 after admitting Ortiz to the partnership capital ,
what were (1) Ortiz’s cash investment and (2) the total bonus to the old partners?

1 | Page Dr. Magdy Kamel

Q3 (exam 2001 q3)
The partnership of Ahmed, Omar, and Saied has been in business for 30 years.
On December 31, 2000, Saied decided to retired from the partnership. The partnership
balance sheet reported the following capital balances for each partner at December 31,
2000.
 Ahmed, capital 300,000
 Omar, capital 400,000
 Saied, capital 240,000
The partners allocate partnership income and loss in the ratio 20 : 30 : 50.

Required
Record the withdrawal of Saied under the following independent situation:
Saied was given 120,000 of cash and partnership land with fair value of 240,000. The
carrying amount of land on the partnership books was 200,000. Capital of the partnership
after Saied’s retirement was 620,000.

Q4 (Exam (2013 q4)

On Dec 31, the total capital balance and income reatios in BAG company are as follows:
Partner Capital Income ratio
Lois Hamilton 60,000 50%
Mary McGovern 40,000 30%
Donna guehler 34,000 20%

Required
a) journalize the withdrawal of Guehler under each of the following assumptions:
1) each of the continuing partners agrees to pay 18,000 in cash from personal funds to
purchase Guehler’s ownership equity. each receives 50% of Guehler’s equity
2) McGovern agrees to purchase Guehler’s ownership interest for 30,000 cash.
3) Guehler is paid 38,000 from partnership assets, which includes a bonus to the retiring
partner
4) Guehler is paid 28,000 from partnership assets, and bonuses to remaining partners
are recognized
b) if McGovern’s capital balance after Guehler’s withdrawal is 43,000 what were
1) total bonus to the remaining partners (2) cash paid by the partnership to Guehler ?

2 | Page Dr. Magdy Kamel

Q10 (exam 2015 q3)
The grier and otto partnership has partner capital accounts balances as follows

Grier, capital 110,000

Otto, capital 50,000

The partners share income and losses in the ratio of 60% to grier and 40% to otto

Required

Prepare the journal entry on the books of the partnership to record the admission of trent
as new partner under the following three independent circumstances.

1. Trent pay 70,000 to grier and 30,000 to otto for one-half of each of their ownership
interest in personal transaction.
2. Trent invests 170,000 in the partnership for a one-third interest in the partnership
capital
3. Trent invests 35,000 in the partnership for a one-third interest in the partnership
capital

Q11 (exam 2015 q4)

A, capital is 50,000, b, capital is 30,000 , and c, capital is 40,000.

They share income in a 3 : 1 : 1 ratio. C is retiring from the partnership.

Required :

Journalize the withdrawal of c under each of the following assumptions:

a) C is paid 48,000 , and no goodwill is recorded.

b) C is paid 50,000 , and only his share of the goodwill is recorded
c) C is paid 45,000 , and all implied goodwill is recorded

3 | Page Dr. Magdy Kamel