A, B and C were partners with capital balances on January 1, 2020 of 100,000, 150,000, and 200,000respectively. Their profit and loss ratio is 50%, 30% and 20%, respectively. On July 1, 2020, A retires fromthe partnership. On the date of retirement the partnership net income is 140,000 and the partners agreedthat inventories are to be revalued at 70,000 from its original cost of 50,000. The partnership agreed furtherto pay A, 195,000 in settlement of his interest. What are the capital balances of the remaining partners afterthe retirement of A using bonus method?

In this case capital on July 1 is:- Capital=opening capital+ Share in profit+ Share in FV changes

Answered: A, B and C were partners with capital…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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