D1, D2, and D3 are partners whose capital balances are P250,000, 150,000, and P125,000 respectively and their profit ratio are 50:25:25 respectively. D4 is admitted into the partnership by purchasing 1/3 equity share of D2 for P60,000 and investing P200,000 cash to the partnership. The partners agree to the total capitalization of P750,000, 1/3 of which is D4 capital credit and share in profits and the old partners will share in the remaining profit based on their old ratio. What is the capital balance of D1 after the admission of D4?
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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