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Camus and Cuenco our partners have capital balances of 1 Camus, Capital(90K x 1/3) 30,000.00
P90,000 & P60,000 and who share profits 60% and 40% Cuenco, Capital(60K x 1/3) 20,000.00
respectively. they agreed to admit Cerda as a partner upon his Cerda, Capital 50,000.00
payment of P90,000.
To record the investment of Cerda
Instructions: Give the journal entries to record each of the
following independent assumptions: 2 Other Assets 120000.00
Camus, Capital 72,000.00
1. 1/3 of the capital balances of the old partners are transferred Cuenco, Capital 48,000.00
to the new partner, Camus and Cuenco dividing the cash To record the revaluation of assets
between themselves.
Camus, Capital 54,000.00
2. 1/3 of the capital balances of the old partners are transferred Cuenco, Capital 36,000.00
to the new partner, Camus and Cuenco dividing the cash Cedra, Capital 90,000.00
between themselves. However before recording the admission To record the admission of Cedra
of Cerda, asset revaluation is undertaken on the firm books so
that Cerda's capital may be equal to the amount paid for the
New Partnership Capital 90,000.00 1/3 270,000.00
interest.
Asset Revaluation 270,000.00 150,000.00 420,000.00
3. The cash is invested in the business and Cerda is credited Allocation of Asset Revaluation 120,000.00 60% 72,000.00
with a 1/4 interest in the firm, the bonus method being used in 120,000.00 40% 48,000.00
recording his investment.
Camus, Capital Cuenco, Capital
4. The cash is invested in the business and Cerda is credited Capital Balances Bef. Revaluation 90,000.00 60,000.00
with the full amount of his investment which is to be 25% of the Share on Asset Revaluation 72,000.00 48,000.00
new firm capital. Capital Balances After Revaluation 162,000.00 108,000.00
3 Cash 90,000.00
Cedra, Capital 60,000.00
Camus, Capital 18,000.00
Cuenco, Capital 12,000.00
To record the admission of Cedra
4 Cash 90,000.00
Cerda, Capital 90,000.00
To record the admission of Cedra
AC CC Revaluation
Old(3/4) 270,000.00 150,000.00 120,000.00
New(1/4) 90,000.00 90,000.00 -
360,000.00 240,000.00 120,000.00
5 Cash 90,000.00
Camus, Capital 18,000.00
Cuenco, Capital 12,000.00
Cedra, Capital 120,000.00
To record the admission of Cedra
AC CC BONUS
120,000.00 150,000.00 -30,000.00
120,000.00 90,000.00 30,000.00
240,000.00 240,000.00 -