A and B share profits and losses equally but they have decided to liquidate their partnership when their net assets amounted to P260,000, and capital balances of P170,000 and P90,000, respectively. If the noncash assets were sold for amount equal to its book value, what amount of cash should A and B receive?

A and B share profits and losses equally but they have decided to liquidate their partnership when their net assets amounted to P260,000, and capital balances of P170,000 and P90,000, respectively. If the noncash assets were sold for amount equal to its book value, what amount of cash should A and B receive?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 38P

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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