Problem #12 Admission by Investment of Assets Magdaraog and Mercado are partners in Magdaraog and Mercado Partnership with capital balances of P550,000 and P350,000, respectively; they share income...

Extracted text: Problem #12 Admission by Investment of Assets Magdaraog and Mercado are partners in Magdaraog and Mercado Partnership with capital balances of P550,000 and P350,000, respectively; they share income and loss in the ratio 1:3, respectively. The partners are considering the admission of San Pedro. Required: Prepare the entries to record the admission of San Pedro under each of the following independent situations: 1. San Pedro invested P100,000 cash in the partnership for a one-tenth interest. The net assets of the partnership are fairly valued. 2. San Pedro invested P140,000 cash in the partnership for a one-eight interest. Assets of the partnership are fairly valued except for equipment, which is undervalued by P80,000. Net assets of the partnership are to be revalued and San Pedro is to be admitted. 3. San Pedro is to receive a one-tenth interest in the partnership upon investing P180,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method. 4. San Pedro is to receive a 20% interest in the partnership upon investing P200,000 cash. Net assets of the partnership are fairly valued. San Pedro is to be admitted using the bonus method.