0, 2003, the condensed balance sheet for the partnership of Eddy, Fox, and Grimm, together with their respective profit and loss sharing percentages were as follows: Assets, net of liabilities 320,000 Eddy, capital (50%) 160,000 Fox, capital (30%) 96,000 Grimm, capital (20%) 64,000 320,000
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.
On June 30, 2003, the condensed
|
Assets, net of liabilities |
320,000 |
|
Eddy, capital (50%) |
160,000 |
|
Fox, capital (30%) |
96,000 |
|
Grimm, capital (20%) |
64,000 |
|
320,000 |
Assume instead that Eddy remains in the partnership and that Hamm is admitted as a new partner with a 25% interest in the capital of the new partnership for a cash payment of ₱140,000. The bonus method shall be used to record the admission of Hamm. Immediately after admission of Hamm, Eddy’s capital account balance should be
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