Problem: Coloma and Claudio are partners with capital balances of P100,000 and P50,000 respectively.

They share P&L equa

Case 1a: Purchase at book value from one partner only.
Cordero purchases a 1/5 interest from Coloma, paying P20,000.
JE
Coloma, Capital 20,000.00 after reflecting this, we will still have the same amoun
Cordero, Capital 20,000.00

Case 1b: Purchase at book value from more than one partner.
Cordero purchases 1/5 interest from the old partners by paying 30,000.
JE
Coloma, Capital 20,000.00
Claudio, Capital 10,000.00
Cordero , Capital 30,000.00

Case 2: Purchase at less than book value.

Cordero purchases a 1/5 interest from the old partners by paying P25,000
JE
Coloma, Capital 20,000.00
Claudio, Capital 10,000.00
Cordero, Capital 30,000.00

Case 3: Purchase at more than book value.

Cordero purchases a 1/5 interest from the old partners by paying P40,000.
JE
Coloma, Capital 20,000.00
Claudio, Capital 10,000.00
Cordero, Capital 30,000.00

ASSET POSITIVE REVALUATION

partners balance before admission p&l *santos, the new partner

antonio 150,000.00 40% purchases 1/4 interest paying 80k.
pascua 100,000.00 30%
mendiola 50,000.00 30%
TOTAL 300,000.00 100%

step 1 : new partnership capital step 4 : old balance after AR = old bal + AR
320,000.00 soln : 80,000 x 1/4 antonio
 bal b4 AR 150,000.00
step 2: AR= new capital - old capital AR 8,000.00
20,000.00 soln: 320k - 300k cap after AR 158,000.00

step 3: allocation of AR step 5 : new cap balances times interest transferred

antonio 8,000.00 soln: ar * p&l antonio
pascua 6,000.00 cap after AR 158,000.00
mendiola 6,000.00 interest 1/4
TOTAL 20,000.00 cap trans to 39,500.00
new partner
0 respectively. They share P&L equally. Cordero is admitted to the partnership.

Coloma 80,000.00
is, we will still have the same amount of capital. Claudio 50,000.00
Cordero 20,000.00 150,000.00

*you would know that it is a purchase less than the

book value because Cordero must pay 30k to satisfy
the interest, but he paid only 25k which says
that Cordero paid less than book value

*you would know if it’s a purchase more

than the book value because 1/5 interest
totals to 30k and Cordero paid 40k.

the new partner

interest paying 80k.
galing sa IM

ce after AR = old bal + AR step 6: Journal Entries

pascua mendiola Other Assets 20,000.00
 100,000.00 50,000.00 Antonio 8,000.00
6,000.00 6,000.00 Pascua 6,000.00
106,000.00 56,000.00 Mendiola 6,000.00

balances times interest transferred Antonio 39,500.00

pascua mendiola Pascua 26,500.00
106,000.00 56,000.00 Mendiola 14,000.00
1/4 1/4 Santos 80,000.00
26,500.00 14,000.00