On May 15,2020, C was admitted to the partnership by purchasing 10%interest from partner A amounting to P25,000 and P100,000 investmentin equipment with mortgage payable of P10,000. Prior to admission,partner A and B has a capital balance of P220,000 and P130,000,respectively. They share profit or losses equally. Partner C was given a10% interest in the partnership and 20% interest in the profit or losssharing.On June 30, 2021, the partnership reported a net income of P120,000allocated based on the new profit or loss sharing ratio.On July 1, 2021, partner A withdrew from the partnership and was givenP140,000 cash and P125,000 notes payable.Determine the ending capital balance of partner C after the retirement ofpartner A.

the interest in the partnership of C is different from the interest in profit & loss of the…

Answered: Determine the ending capital balance of…

Business

Accounting

Determine the ending capital balance of partner C after the retirement of partner A.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

On May 15,2020, C was admitted to the partnership by purchasing 10%
interest from partner A amounting to P25,000 and P100,000 investment
in equipment with mortgage payable of P10,000. Prior to admission,
partner A and B has a capital balance of P220,000 and P130,000,
respectively. They share profit or losses equally. Partner C was given a
10% interest in the partnership and 20% interest in the profit or loss
sharing.
On June 30, 2021, the partnership reported a net income of P120,000
allocated based on the new profit or loss sharing ratio.
On July 1, 2021, partner A withdrew from the partnership and was given
P140,000 cash and P125,000 notes payable.
Determine the ending capital balance of partner C after the retirement of
partner A.

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