Arshman, Aahil and Arad decided to form a partnership firm under the name of A Star Enterprises. The partners sharing profit or loss equally and equal contribution in capital: Mr. Babar Invest Cash Rs. 60,000/- Merchandise inventory Rs. 55,000/- Supplies Rs. 20,000/-Office BuildingRs. 250,000 and Machinery Rs.70,000/- Mr. Aahil Invest Merchandise inventory Rs.40,000/-Equipment’sRs. 230,000/- Furniture Rs. 10,000/- and invested sufficient Cash to reach his capital equal to Mr. Babar. Mr. Arad Invest Cash Rs. 20,000/- Furniture Rs. 90,000; Machinery Rs.50, 000/- Van Rs.100,000/- and invest Merchandise inventory to bring his capital equal to his other partners. Required: Give entries in general journal to record the investment of partners.
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.
Arshman, Aahil and Arad decided to form a partnership firm under the name of A Star Enterprises.
The partners sharing profit or loss equally and equal contribution in capital:
Mr. Babar Invest Cash Rs. 60,000/- Merchandise inventory Rs. 55,000/- Supplies Rs. 20,000/-Office BuildingRs. 250,000 and Machinery Rs.70,000/-
Mr. Aahil Invest Merchandise inventory Rs.40,000/-Equipment’sRs. 230,000/- Furniture Rs. 10,000/- and invested sufficient Cash to reach his capital equal to Mr. Babar.
Mr. Arad Invest Cash Rs. 20,000/- Furniture Rs. 90,000; Machinery Rs.50, 000/- Van Rs.100,000/- and invest Merchandise inventory to bring his capital equal to his other partners.
Required: Give entries in general journal to record the investment of partners.
Step by step
Solved in 2 steps with 2 images
