Corporate Accounting Past Paper PDF Fall 2024-2025

Course Name: corporate accounting Course instructor : DR / Duaa sadek Credit hours : 3 hours Semester/Academic year: Fall/2024-2025 Section : 3 ‫يتم حل المحاضرة الرابعه والخامسه مرة اخري باالضافة للسكشن‬ Question one : maged and Joe share partnership income on a 3:2 basis. They have capital balance...

Course Name: corporate accounting Course instructor : DR / Duaa sadek Credit hours : 3 hours Semester/Academic year: Fall/2024-2025 Section : 3 ‫يتم حل المحاضرة الرابعه والخامسه مرة اخري باالضافة للسكشن‬ Question one : maged and Joe share partnership income on a 3:2 basis. They have capital balances of $560,000 and $280,000, respectively, when Vann is admitted to the partnership. Required: Prepare the journal entry to record the admission of Vann under each of the following independent situations: (a) Vann invests $340,000 for a 25% ownership interest. (b) Vann invests $200,000 for a 25% ownership interest. (c) Vann invests$280,000 for a 25% ownership interest. (d) Vann purchases one-half of maged’s equity for $90,000 and one-fourth of joe's equity for $50,000  SOLUTION (A)amount invested =340000 His interest in the new partnership = = (560000 + 280000 + 340000) =1180000 X 25% = 295000 amount invested more than his capital interest = 340000 – 295000 = 45000 So there is a bonus from the new partner to the existing partners The entry : Cash 340000 Vann,s capital 295000 Maged,s capital 27000 (45000 X 3/5) Joe,s capital 18000 (45000 X 2/5) Maged ‘s balance in capital after admission = 560000 + 27000 = Joe’s balance in capital after admission =280000 +18000 (b) amount invested =200000 His interest in the new partnership = = (560000 + 280000 + 200000) =1040000 X 25% = 260000 amount invested less than his capital interest = 260000 - 200000 = 60000 So there is a bonus from the existing partners to new the partner The entry : Cash 200000 Maged,s capital 36000* Joe ,s capital 24000 * Vann ,s capital 260000 (60000 X 3/5) (60000 X 2/5) Maged ‘s balance in capital after admission 560000 - 36000 Joe’s balance in capital after admission 280000 - 24000 (c) amount invested = 280000 His interest in the new partnership = = (560000 + 280000 + 280000) =1120000 X 25% = 280000 amount invested equal his capital interest so there is no bonus the entry : cash 280000 vann ,s capital 280000 balances of capital for maged and joe after admission equal their balances before admission maged ,s capital = 560000 joe ,s capital = 280000 (d) this transaction is considered personal transaction between the new partner and the existing partners The entry : Maged,s capital 280000* Joe,s capital 70000* Vann,s capital 350000 (560000 X ½) (280000 X ¼) Capital of maged and joe decrease by 280000 and 70000 and in the same time capital of the new partner vann increase by 350000 So there is no effect on the partnership ‘s capital Just the number of partners increase from two to three partners Question two : Salah, Ali, and Ahmed have capital balances of $150,000, $100,000, and $75,000, respectively, and their income ratios are 4:2:4. Required : Record the withdrawal of Ahmed from the partnership under each of the following independent situations : 1. Ahmed is paid $75,000 from partnership assets. 2. Ahmed is paid $90,000 from partnership assets. 3. Ahmed is paid $55,000 from partnership assets. 4. salah agrees to pay Ahmed $100,000 for one- half of his capital interest and Ali agrees to pay Ahmed $60,000 for one-half of his capital interest in a personal transaction among the partners.  Solution 1. amount paid = 75000 His capital = 75000 Amount paid to ahmed equal his capital , so there is no bonus The entry : Ahmed ‘s capital 75000 Cash 75000 Capital of salah and ali after withdrawal still the same 150000 and 100000 respectively 2. amount paid= 90000 His capital = 75000 Amount paid to ahmed more than his capital So there is bonus of 15000 from the existing partners to the retiring partner The entry : Ahmed ‘s capital 75000 Salah ‘s capital 10000 Ali ‘s capital 5000 Cash 90000 (15000 X 4/6) (15000 X 2/6) Salah ‘s balance in capital after withdrawl of ahmed = 150000 – 10000 Ali’s ‘s balance in capital after withdrawl of ahmed = 100000 – 5000 3. amount paid= 55000 His capital = 75000 Amount paid to ahmed less than his capital So there is bonus of 20000 from the retiring partner to the existing partners The entry : Ahmed ‘s capital 75000 Cash 55000 Salah’s capital 13333 Ali ‘s capital 6667 (20000 X 4/6) (20000 X 2/6) Salah ‘s balance in capital after withdrawl of ahmed = 150000 + 13333 Ali’s ‘s balance in capital after withdrawl of ahmed = 100000 + 6667 4. this transaction is considered personal transaction between the retiring partner and the existing partners The entry : Ahmed ‘s capial 75000 Salah ‘s capital 37500 Ali’s capital 37500 Capital of salah and ali increase by 37500 and 37500 respectively and in the same time the retiring partner ahmed ‘s capital decrease by 75000 ; so there is no effect on the partnership ‘s capital Just the number of partners decrease from three to two partners