18 Pepe and Pilar are partners having capital balances of P 35,000 and P 25,000, respectively. They share profits in the ratio of 6:4. Juan is to invest sufficient cash to give him a 40% interest in the new capital, which is proportionate to his share in the earnings. The old partners will share in the balance of the earnings using their original profit sharing ratio. REQUIRED: a. Give the entry to record the admission of Juan. b. Show the interest of each partner (expressed as a percentage) in the total capital before and after the admission of Juan. c. What is the new profit and loss sharing ratio? ONKED
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.
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