In: Accounting
Assume the following data on January 1, 2019 for KLM Partnership had the following condensed balance sheet:
Assets Liabilities and Capital
Cash
P60,000
Liabilities
P12,000
Non-cash
assets
48,000
K, Capital
(30%)
36,000
Loans receivable –
K
6,000
L, Capital
(50%)
48,000
M, Capital
(20%)
18,000
Total
P114,000
P114,000
The percentages in parentheses after partner’s capital balances represent their respective interests in profits and losses. On May 1, 2019, K retires from the partnership. The net income of the partnership to date of retirement amounted to P24,000. The partnership paid cash to the retiring partner also on retirement date.
Required:
b.1 Bonus method
b.2 Asset revaluation method (Total revaluation)
c. Payment at less than book value. The partnership paid K, P31,200.
c.1
Bonus method
c.2 Asset revaluation method
(Total revaluation)