PARTNERSHIP DISSOLUTION

Problem 1

Admission by Purchase of Interest. The capital accounts of the Marquez and

Monte partnership on Sept. 30, 2018 were: Marquez, Capital (75% profit
percentage) Monte, Capital (25% profit percentage) P140,000 56,000 Total Capital
P196,000 On Oct. 1, Galang was admitted to a 35% interest in the partnership
when he purchased 35% of each existing partner's capital for P100,000, paid
directly to Marquez and Monte.

Required: Determine the capital balances of Marquez, Monte, and Galang after
Galang's admission to the partnership.

Problem 2

Admission by Purchase of Interest and Investment of Assets. The capital accounts

of Loida Cardenas and Cristina San Jose have balances of P150,000 and P110,000,
respectively. Daria Labalan and Helen Maganda are to be admitted to the
partnership. Labalan buys one-fifth of Cardenas' interest for P35,000 and one-
fourth of San Jose's interest for P25,000. Maganda contributes P70,000 cash to
the partnership, for which she is to receive an ownership equity of P70,000.

Required: 1. Journalize the entries to record the admission of Labalan and

Maganda. 2. What are the capital balances of each partner after the admission of
the new partners?