Nama : Andito Yusuf Alkhafie NIM : 042011333243
Kelas : AKL II – L
TUGAS WEEK 9
E.16-7
INVESTING IN EXISTING PARTNERSHIP
Liu and Wang are in a partnership with a profit-sharing ratio of 40 percent and 60 percent, respectively. Liu has a capital balance of $3,000,000 and Wang has a capital balance of
$2,500,000. The partners agree to admit Ping into the partnership for a 40 percent interest with an investment of $6,000,000.
REQUIRED :
1. Calculate the balance of each partner’s capital if the assets of the partnership are revalued.
2. Calculate the balance of each partner’s capital if the assets of the partnership are not revalued.
ANSWER
1. Total equity of partnership before revaluation
$ 3,000,000 à Liu
$ 2,500,000 à Wang
$ 6,000,000 à Ping
$ 11,500,000
To get capital interest
40% x $ 11,500,000 = $ 4,600,000
Ping has to invest for $ 6,000,000 (goodwill to old partners)
Fair value of the partnership ($ 6,000,000 / 40%) $ 15,000,000 Total equity of partnership before revaluation $ 11,500,000
Goodwill $ 3,500,000
Allocation of goodwill :
To Liu ($ 3,500,000 x 40%) $ 1,400,000
To Ping ( 3,500,000 x 60%) $ 2,100,000
$ 3,500,000
Capital balance of each partner :
Liu Wang Ping
$ 3,000,000 $ 2,500,000
$ 1,400,000 $ 2,100,000
$ 4,400,000 $ 4,600,000 $ 6,000,000
2.
Ping interest in the partnership ($ 11,500,000 x 40%) $ 4,600,000 Total bonus to old partners ($ 6,000,000 - $ 4,600,000) $ 1,400,000
Capital balance of each partner :
Liu Wang Ping Total
$ 3,000,000 $ 2,500,000 $ 11,000,000 40 % x $ 1,400,000 60% x $ 1,400,000 40%
$ 3,560,000 $ 4,600,000 $ 4,600,000 $ 11,500,000
P.16-3
PARTNERSHIP INCOME ALLOCATION
Ash and Bar are partners with capital balances on January 1, 2016, of $70,000 and $80,000, respectively. The partnership agreement provides that each partner is allowed 10 percent interest on beginning capital balances; that Ash receives a salary allowance of $20,000 per year and a 20 percent bonus of partnership income after interest, salary allowance, and bonus; and that remaining income is divided equally.
REQUIRED : Prepare an income distribution schedule to show how the $160,000 partnership net income for 2016 should be divided.
ANSWER
Working Notes
Compute the total interest on capital using the equation as follows :
Total interest = Interest rate x (opening capital of A + opening capital of B)
= 10% x ($70,000 + $80,000)
= 10% x $150,000
= $15,000
Compute the bonus using the equation as follows :
Bonus = !"#$ &' (&)*+ , (.$# /)0&1$23)#$4$+#25"6"47) 9:!"#$ &' (&)*+
= ;<% , ($9?<,<<<2$9A,<<<2$;<,<<<) 9:;<%
= ;<% , $9;A,<<<
9.;<
= $20,833
