Situation 1. Dave purchases a ¼ interest in the firm. One-fourth of each partner’s capital is to be transferred to the new partner. Dave pays the partners P60,000, which is divided between them in proportion to the equities given up. The assets of the partnership are to be adjusted.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
A
Assets
Liabilities and Capital
Cash P15,000
Liabilities P45,000
Non-cash assets 195,000 Aron, capital(50%) 90,000
Charlie, loan 15,000
Ben, capital(30%) 30,000
Charlie, capital(20%) 60,000
The percentages in parenthesis after the partners’ capital balances represent their respective interests in
From the following, prepare the
balances of the partners in the new partnership.
Situation 1. Dave purchases a ¼ interest in the firm. One-fourth of each partner’s capital is to be transferred to the new partner. Dave pays the partners P60,000, which is divided between them in proportion to the equities given up. The assets of the partnership are to be adjusted.
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