AA Chapter3

7/25/2019 AA Chapter3

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CHAPTER 3

EXERCISES

1. Original Partners Equity Transfer of Interest Revised Partners EquityArtuz 25, 25,

!ruz 25, " #12,5$ 12,5%era &&&&&& 12,5 12,55, 5,

Entry' !ruz, !a(ital 12,5%era, !a(ital 12,5

Original P)* Ratio Transfer P)* Ratio Revised P)* RatioArtuz + +!ruz - " #2$ 2%era &&&& 2 2

1 1

2. a$ Original Partners Equity Transfer of Interest Revised Partners EquityPio -, " #2-,$ 2-,

/asa 02, #+,$ +,!ortez , #15,$ 15,iaz &&&&&&& 05, 05,

15, 15,

3$ Original Partners Equity Transfer of Interest Revised Partners EquityPio -, #,$4 1,/asa 02, #-5,$4 20,!ortez , ,iaz &&&&&&& " of 15, 05, 05,

15, 15,4 -12 6 05,

0212 6 05,

7$ Original Partners Equity Revaluation PE after Revaluation Transfer ofInterest PE RevisedPio -, -, , " # -,$ 52,/asa 02, 5 , -,

!ortez , 2 ,2 ,2

iaz & &&&&& &&&&& &&&&&&& -, -,15, 1+, 1++, 1++,

OR

iaz is 8illing to (ay P-, for " of /asas interest

/asas interest 9 is i:(lied to 3e ,; (er 3oo< 02,

; s=are in undervaluation ,

ivide 3y 5

Total revaluation 1+,

Entries'

a$ Pio, !a(ital 2-,

/asa, !a(ital +,!ortez, !a(ital 15,

iaz, !a(ital 05,

3$ Pio, !a(ital ,/asa, !a(ital -5,

iaz, !a(ital 05,

7$ Assets 1+,Pio, !a(ital -,

/asa, !a(ital ,!ortez, !a(ital ,2

Pio, !a(ital -,

iaz, !a(ital -,

. Original PE At P)* Ratio iff. Re(resents 7as= settle:ent/ella -, #-$ -, ,

!arlos 5, #5$ -2, ,iaz , #25$ ,

12, 12,

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Entry' !arlos, !a(ital ,/ella, !a(ital ,

-. If only 7as= invest:ent is involved, total agreed equity s=ould 3e =ig=er t=an 12,. Trial and error'

/ella, !a(ital -, - 1, re>e7t sin7e it is lo8er !arlos, !a(ital 5, 5 1-2,50 a77e(t, =ig=er 3y 2,50iaz, !a(ital , 25 12, re>e7t, sa:e as original PE

T=e lo8est (ossi3le invest:ent is P2,.

Original PE Agreed Additional

/ella -, - 50,1-2. 10,1-2.!arlos 5, 5 5,.iaz , 25 5,01-.2 5,01-.2

12, 1-2,50. 22,50.

5. Original Partners Transfer of Revised

1$ Equity Interest Partners Equity

Anson 1, 2 #2,$ ,Rustan 5, #1,$ -,

?y &&&&&&& , ,

15, 15,

4 15,62 @ ,615 @ 2, 515 @ 1,

2$ Offer of r ?y +,

ivide 3y 2%alue of Partners Equity ,

Original Partners Equity 15,Asset Revaluation 15,

Original PE Asset Rev. PE After BC Transfer of Interest

PE AfterAd:ission

Anson 1, 112,5 212,5 #2$ #-2,5$ 10,Rustan 5, 0,5 0,5 #10,5$ 0,?y &&&&&&& &&&&&&& +, +,

15, 15, , ,

+. a$ Total

Invest:ent /onusPE After Ad:.Agreed Equity

Anson 1, 1,5 11,5Rustan 5, -,5 5-,5?y +, #1,$ -2, 2

21, ; 21,

3$ TotalInvest:ent

PE After Ad:.#Agreed Equity$

AssetRevaluat

ion

Anson 1, 1+0,5 +0,5Rustan 5, 02,5 22,5?y +, +, #2$ &&&&&&

21, , D,

Invest:ent Agreed Equity Asset Critedo8n !a(ital after Ad:ission7$Anson 1, 1+,05 6 @ ,125

Rustan 5, 5,+25 6 F @ --,05?y +, +, +,

21, 10,5 #15, $ 22,5

10,5

0.a$ !ontri3utions Agreed

5, 5,G , ,

2, 2,* H 2 25, #125,62$

4125, #1,$

3$ !ontri3utions Agreed Asset Rev.

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5,G ,

2,* 5, 5,2

15, 4 2, @ 5,

Asset revaluation s=ould 3e for original (artners. T=us ne8 (artners invest:ent @ =er 7a(ital 7redit

1$!as= 5, *una, !a(ital 5,

2$

Asset 5, onzon, !a(ital 25, Gavier, !a(ital 15, a


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3$ T!! /onus TA!Ortiz 255,05 #5,25$ 10,+25Pon7e 1DD,125 5,25 2-,05!=an 11,05 ; 11,05

5+,05 5+,05

7$ Ortiz Pon7e Total10,125 2D+,05 -05,

2+,05 211,+25

# 5,25$ 5,25

1. a$?=are of *ane in et In7o:e #12, 6 012 6 11$ 0,*ane, !a(ital /eg. -2,*ane, ra8ing # 2,$*ane, !a(ital Guly 1 -0,

In7o:e ?u::ary 0, *ane, !a(ital 5, *ane, ra8ing 2,

3$ *ane, !a(ital -0,!lar


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adel, ra8ings -0,5 Gos=, ra8ings 1-2,5

Revised PE' adel -,;1,LD,2L5L-0,5 PD5,05 Gos= D, L 20,+L 15L 1-2,5 2+,25

1. A. Original Transfer Invest:ent Revised

!o33 +, +,avis D, 1 #,$ +, 1D, Eddy 0, 0, @ 20,5 6 2Jay , 10,5 -0,5 @ -0,5

22, ; 10,5 20,5 Jay !a(ital Invest:ent

/. Invest /onus Revised !. Original Transfer Revised

! +, #5,$ 55, ! +, +, D, #,$ 0, D, #2-,05$ +5,25E 0, #2,$ +, E 0, #1D,25$ 5,05J -2,5 1, 52,5 J &&&&&&& --, --,

2+2,5 2+2,5 22, 22,

. Original Bood8ill Revised E. ! +,! +, +, D,

D, D, E 0,E 0, 0, J +, +, #2$

J --, 11, 55, 2, , o BC to old

2+-, 11, 205, (artners

J. Pro(erties -,!o33, !a(ital 2,

arvis, !a(ital 12,

Eddy, !a(ital ,

!o33, *oan 2,

!o33, !a(ital ,

!as= 1,

Revised PE' avis, !a(ital 12,

Eddy, !a(ital 0,

Total 1,

1-. O7t 2, 2D aty, !a(ital +,Paya3le to atys Estate +,

e7. 1, 2D In7o:e ) E6(ense ?u::ary -,DPaya3le to atys Estate -,D

- 6 1 6 D12 @,

+, 6 12 6 12 @1,D

In7o:e ) E6(ense ?u::ary 5,11*u7y, ra8ing #-D$ 15,+-.--

ay, ra8ing #5D$ 1D,55.5+

#-, 9 -,D @ 5,11$

O7t. 21 Paya3le to atys Estate +-,D

Interest E6(ense #+, 6 12 6 D12$ 5,+0

!as= 0,5+

15. Equi(:ent 15, Partners !a(ital 1,,

!urrent Assets #5,$ Ad>ust:ent, net # 2,$

Total Ad>ust:ent #2,$ Ad>usted 7ont. 1,1,P% 2, s=are M P5 1,,

API! 1,

!a(ital Ad>ust:ent 5,

!urrent Asset 5,

Equi(:ent 15,


ison, !a(ital 12,00

Estrera, !a(ital 0+,D2


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*ia3ilities 1,

ison, !a(ital +D+,D2

Estrera, !a(ital -2,00

!urrent Asset D,Equi(:ent ,

/alan7e ?=eet

!urrent Assets P1, D, !urrent Asset D,

Equi(:ent , Equi(:ent ,Total Assets 1,2, *ia3ilities 1,

*ia3ilities 1, ?=are !a(ital 1,,

?=are !a(ital 2,, ?=are Pre:iu: 1,

?=are Pre:iu: 1,Total *ia3 ) Equity P2,2, !as= 1,,

?=are !a(ital 1,,

MULTIPLE CHOICE

1. Total 7ontri3utions of P15, is also total agreed equity!ontri3utions of Evans ,

Agreed Equity of Evans #1$ 5,/onus to Evans 2,

!o6 , 9 + of 2, +,

/ro8ning -, 9 - of 2, 2, Ans8er' A

2. PE /efore Bood8ill PE After BC PE After Ad:.orly , L + #2,$ D2, 6 05 +D,Beorge -, L #2,$ -+, -,5i7< 2, L 1 #2,$ 22, 1+,5

1-, 1+, 12,

Total Inferred Assets #-, 25$ 1+,

Total (artners equity 1-,Bood8ill 2, Ans8er' /

. !a(ital, Gan. 1 ,?=are in et In7o:e #-, 6 2 6 +12$ -,ra8ings # 1,5$

Invest:ent 5,

1$ , Ans8er' EBood8ill , 6 2 +,

2$ --, Ans8er' E

-. !ontri3ution Pur7=ase Invest:ent Total Agreed Bood8ill /onus Reviseditz D5, D5,

ar7 , #12,$ +, -,5 +,+ 0D,1art +, +,%in7e 12, , D2, 0, #22,$

15, , 15,

1$Ans8er' /2$Ans8er' !

5. Ans8er' +. Ans8er' !

0. et assets at fair value D2,!a(ital ?to7< 1,API! 2,Ans8er'

. Old (artners interest 1-,ivide 3y t=eir interest ratio -5Total agreed interest 105,ulti(ly 3y Ns interest 15

5,

Ans8er' !

D. Total (artners equity 15,Re:aining (artners equity ,Cit=dra8ing (artners equity 25,!as= Pay:ent 0,?=are in Bood8ill 12,ivide 3y =is P)* ratio 2Total i:(lied good8ill +,Ans8er' A

1. et In7o:e P 12,

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Add a77rued in7o:e of 20 0, nearned in7o:e of 2+ D, *ess Pre(aid e6(ense of 2+ #11,2$ A77rued e6(ense of 20 #,-$ et in7o:e as 7orre7ted 110,2 ?=are of Ga7< at 15 P10,5Ans8er /

11. 1,L2,L1D, @ 0, Total Agreed @ 0,562 ?=are ) invest:ent of J @ 105,Ans8er !

1+

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AA Chapter3