9. Athena and Apollo share profits and losses on a 6:4 basis. They have capital balances of P110,000 and P90,000, respectively, when Titus is admitted to the partnership. The assets of the partnership must first be revalued. There are two options: a. Titus will invest P120,000 cash for a 30% ownership interest b. Titus will invest P75,000 cash for a 30% ownership interest. (see attached image for the actual questions/informations. please answer it based on your knowledge. thank you so much!) Direction: a. Under each option, prepare a table showing contributed capital against agreed capital. Total agreed capital should not be the same as total contributed capital. b. Under each option, record the asset revaluation and the admission of Titus. c. Give two reasons why the existing partners may not accept the second option.
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. Athena and Apollo share
a. Titus will invest P120,000 cash for a 30% ownership interest
b. Titus will invest P75,000 cash for a 30% ownership interest.
(see attached image for the actual questions/informations. please answer it based on your knowledge. thank you so much!)
Direction:
a. Under each option, prepare a table showing contributed capital against agreed capital. Total agreed capital should not be the same as total contributed capital.
b. Under each option, record the asset revaluation and the admission of Titus.
c. Give two reasons why the existing partners may not accept the second option.
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