Answered: After the realization of non-cash…

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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2) After the realization of non-cash assets, the following account balances appeared in the genera ledger of the partnership of See, Chap, and Pooh.

Cash P 10,000

Liabilities 30,000

Pooh,Loan 5,000

See,Capital 15,000

Chap,Capital 10,000

Pooh,Capital 10,000

Profits are shared 2:4:4 for See, Chapand Pooh, respectively. Pooh is insolvent.

Q3. How much additional investment did Chap make?

a. 10,000

b. 14,000

c. 15,000

d. 20,000

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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