K1 and K2 are partners who have capital balances of P95,000 and P65,000 and who share profits 60% and 40% respectively. They agree to admit H3 as a partner upon his payment of P94,000. One-fourth (1/4) of the capital balances of the old partners are transferred to the new partner, old partners dividing the cash between themselves K3 the new partner capital must be equal to the amount paid for his interest. How much is the new Profit and loss of K2?

K1 and K2 are partners who have capital balances of P95,000 and P65,000 and who share profits 60% and 40% respectively. They agree to admit H3 as a partner upon his payment of P94,000. One-fourth (1/4) of the capital balances of the old partners are transferred to the new partner, old partners dividing the cash between themselves K3 the new partner capital must be equal to the amount paid for his interest. How much is the new Profit and loss of K2?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
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