Dan, Ron and Ian are partners with capital balances of P224,000; P780,000 and P340,000 each respectively, sharing profits and losses in the ratio of 3:2:1. Pia is admitted as a new partner bringing with her, her expertise and is to invest cash for a 25% interest in the partnership which includes a credit of P210,000 for bonus upon her admission. How much cash should Pia contribute? A. 420,000 C. 210,000 B. 378,000 D. 168,000
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.
Dan, Ron and Ian are partners with capital balances of P224,000; P780,000 and P340,000 each
respectively, sharing
with her, her expertise and is to invest cash for a 25% interest in the
P210,000 for bonus upon her admission. How much cash should Pia contribute?
A. 420,000 C. 210,000
B. 378,000 D. 168,000
Step by step
Solved in 2 steps
