Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership’s capital balances are Caitlin, $135,000; Chris, $95,000; and Molly, $115,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $175,000. The balance in Caitlin’s capital account immediately after Paul’s admission is: Top of Form Multiple Choice $113,700 $123,400 $136,300 $175,000 $156,300
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.
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Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership’s capital balances are Caitlin, $135,000; Chris, $95,000; and Molly, $115,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $175,000. The balance in Caitlin’s capital account immediately after Paul’s admission is:
Top of Form
Multiple Choice
$113,700
$123,400
$136,300
$175,000
$156,300
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