Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Burt has been offered a 25% interest in the firm for P60,000 cash investment. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a: a debit to cash for P75,000 b. debit to loss on sale of partnership interest for P46,000 c credit to Bill, capital for P1,500 d. debit to Bob, capital for P12,000
Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Burt has been offered a 25% interest in the firm for P60,000 cash investment. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a: a debit to cash for P75,000 b. debit to loss on sale of partnership interest for P46,000 c credit to Bill, capital for P1,500 d. debit to Bob, capital for P12,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively.
Burt has been offered a 25% interest in the firm for P60,000 cash investment. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a:
a debit to cash for P75,000
b. debit to loss on sale of partnership interest for P46,000
c credit to Bill, capital for P1,500
d. debit to Bob, capital for P12,000
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