9 Able and Baker are partners with capital balances and profit and loss sharing percentages as follow: Able: $300,000 (40%) Baker: $ 300,000 (60%) Cooper approaches the partnership and it is agreed that for a payment of $80,000, Cooper will receive a 10% interest in future partnership profits. The goodwill method is to be used. What is the balance in Able’s capital account after the admittance of Cooper.
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.
9 Able and Baker are partners with capital balances and
Able: $300,000 (40%)
Baker: $ 300,000 (60%)
Cooper approaches the partnership and it is agreed that for a payment of $80,000, Cooper will receive a 10% interest in future partnership profits.
The
What is the balance in Able’s capital account after the admittance of Cooper.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
