A, B, and C formed a partnership on January 2, 2015 with the following contributions: A $100,000 B 200,000 C 300,000 The partners agreed on a capital ratio of 1:2:3 upon formation and P&L ratio of 3:3:4, respectively. The partnership reported a net loss of $20,000 for 2015. Also, at the end of 2015, C has decided to withdraw from the firm and was paid $250,000 from partnership cash. On April 1, 2016, D was admitted as a partner with an investment of $160,000. He is given a share in capital of 40% and in profits, 30% the old partners have agreed to retain their old ratio over the remaining profit and loss share of 70%. The partnership reported a net profit of $
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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