Reference no: EM132899888

Jake, Klem and Larry are partners whose capital balances and shares in profits and losses are as follows:

              Capital Balance            P/L Ratio

Jake        P80,000                     50%

Klem         40,000                       20

Larry       30,000                        30

Problem 1: Mar has been invited into the partnership. What entry (entries) must be made to record his admission under each of the following assumptions?

a. He pays P75,000 for ½ interest coming from each of the partners.

b. He pays P60,000 for 1/3 interest coming from each of the partners.

c. Same as in (b) above with the additional assumption that partnership assets are understated.

d. Mar pays P18,000 for1/4 of Jake's interest.

e. Same as in d above with the additional assumption that the partnership assets are overstated.