Anne, Portia, and Hedison are partners and share income and losses as follows: Anne, 20%; Portia, 30%; and Hedison, 50%. The partnership’s capital balances follow: Anne, $300; Portia, $150; and Hedison, $450. Ellen is admitted to the partnership with a 25% equity. Prepare journal entries to record Ellen’s entry into the partnership under each separate assumption: Ellen invests (a) $300; (b) $100; and (c) $700.
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.
Anne, Portia, and Hedison are partners and share income and losses as follows: Anne, 20%; Portia, 30%;
and Hedison, 50%. The
Ellen is admitted to the partnership with a 25% equity. Prepare
the partnership under each separate assumption: Ellen invests (a) $300; (b) $100; and (c) $700.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
