During 2020, ASHE and JINX maintained average capital balances of in their partnership of P200,000 and P150,000, respectively. Both partners receive 10% interest on average capital balances, and residual profit or loss is to be divided equally. Partnership profit before interest was P10,000. By what amount should JINX's capital account change for the year?
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.
During 2020, ASHE and JINX maintained average capital balances of in their partnership of P200,000 and P150,000, respectively. Both partners receive 10% interest on average capital balances, and residual profit or loss is to be divided equally. Partnership profit before interest was P10,000. By what amount should JINX's capital account change for the year?
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