Partnership Dissolution: Admission of a New Partner

Comprehensive Example:
Tap, Tip and Tup are partners in TTT Partnership. The partners profit and loss ratio is 20%,
35%, 45%. The ending capital balances as of December 31, 2014 are P250,000, P400,000 and
P350,000. Top is to be admitted as a partner with the consent of all the partners in 2015.
The following are independent transactions by which Top can be admitted. Requirements for
each independent case:
a. Compute for the capital balance of each partner after the admission of Top;
b. Revised equity interest and profit and loss sharing ratio; and
c. Record the admission of Top
Case 1: Top is to be admitted by purchasing 40% of Tip. Tip is to be paid P200,000.
Case 2: Top is to be admitted by purchasing 30% of Tups capital by paying P175,000. Assets
are to be restated to their market values which is P250,000 greater than the current book value.
Case 3: Top is admitted to the partnership by purchasing 20% of Taps equity. Top is to pay Tap
P350,000. Before Tops admission, the partnership has been in operation already for 6 months.
The results of operations for the 6 months period ended follows:
Sales
Cost of Sales
Administrative Expenses
Selling Expenses

P300,000
180,000
50,000
45,000

In addition, the partnership has failed to recognize depreciation for an equipment since it was
purchased. The cost of the equipment is P20,000 and should have been depreciated for 3
years (estimated useful life is 5 years). Assume a 30% tax rate.
Case 4: Top is admitted by investing enough cash to secure a 20% equity and profit and loss
ratio in the agreed capital of P1,250,000.
Case 5: Top is admitted by investing P1,000,000 that would give him a 50% equity
Case 6: Top is admitted by investing P300,000 for a 25% equity in the partnership. No asset
revaluation is to be undertaken before Tops admission.
Case 7: Top is admitted by investing P350,000 for a 20% equity in the partnership. The
partnership assets were already at their fair values before Tops admission.
Case 8: Top is admitted to the partnership by investing P275,000 that would give him a 20%
equity. Asset revaluation is agreed to be undertaken first before Tops admission.
Case 9: Top is admitted to the partnership by investing P375,000 that would give him a 40%
equity. Asset revaluation is agreed to be undertaken first before Tops admission.
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Partnership Dissolution: Admission of a New Partner

Case 10: Top is admitted into the partnership by investing P356,250 for a 25% equity in the
agreed capital of P1,425,000. Asset revaluation was agreed to be undertaken before Tops
admission.
Case 11: Top is admitted into the partnership by investing P350,000 for a 30% equity. The
existing partners agreed to revalue the assets first. The undervaluation was determined to be at
P200,000.
Case 12: Top is admitted into the partnership by purchasing 50% of Tups capital. Top is to pay
Tup P200,000 for the equity purchase. In addition, it was agreed that Top is to invest sufficient
money to give him a 35% equity share.
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Food for the Soul
The Primacy of Peter (Part 1)
Biblical References
There is ample evidence in the New Testament that Peter was first in authority among the
apostles. Whenever they were named, Peter headed the list (Matt. 10:1-4, Mark 3:16-19, Luke
6:14-16, Acts 1:13); sometimes the apostles were referred to as "Peter and those who were with
him" (Luke 9:32). Peter was the one who generally spoke for the apostles (Matt. 18:21, Mark
8:29, Luke 12:41, John 6:68-69), and he figured in many of the most dramatic scenes (Matt.
14:28-32, Matt. 17:24-27, Mark 10:23-28). On Pentecost it was Peter who first preached to the
crowds (Acts 2:14-40), and he worked the first healing in the Church age (Acts 3:6-7). It is
Peters faith that will strengthen his brethren (Luke 22:32) and Peter is given Christs flock to
shepherd (John 21:17). An angel was sent to announce the resurrection to Peter (Mark 16:7),
and the risen Christ first appeared to Peter (Luke 24:34). He headed the meeting that elected
Matthias to replace Judas (Acts 1:13-26), and he received the first converts (Acts 2:41). He
inflicted the first punishment (Acts 5:1-11), and excommunicated the first heretic (Acts 8:18-23).
He led the first council in Jerusalem (Acts 15), and announced the first dogmatic decision (Acts
15:7-11). It was to Peter that the revelation came that Gentiles were to be baptized and
accepted
as
Christians
(Acts
10:46-48).

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