A, B and C are partners with the following P/L ratio and capital balances: A (60%) P100,000; B(30%) P60,000; and C (10%) P20,000. Case 5: C withdraws from the partnership and sells his interest to B for P30,000. Provide the journal entry and determine the capital balances and P/L ratio of the remaining partners after C’s withdrawal.
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.
A, B and C are partners with the following P/L ratio and capital balances: A (60%) P100,000; B(30%) P60,000; and C (10%) P20,000.
Case 5: C withdraws from the partnership and sells his interest to B for P30,000. Provide the
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