Energetic, Fierce and Giant are partners with capital balances on January 2, 2021 of P350,000, P525,000 and P700,000, respectively. Their profit ratio and capital interest ratio is 5:3:2. On July 1, 2021, Humble was admitted by the partnership for 20% interest in capital and in profits by contributing P200,000 cash, and the old partners agree to bring their capital to their profit interest sharing ratio. The partnership had net income of P200,000 before admission of Humble and the partners agree to revalue its overvalued equipment by P50,000. How much is the amount paid/received by Giant?
Energetic, Fierce and Giant are partners with capital balances on January 2, 2021 of P350,000, P525,000 and P700,000, respectively. Their profit ratio and capital interest ratio is 5:3:2. On July 1, 2021, Humble was admitted by the partnership for 20% interest in capital and in profits by contributing P200,000 cash, and the old partners agree to bring their capital to their profit interest sharing ratio. The partnership had net income of P200,000 before admission of Humble and the partners agree to revalue its overvalued equipment by P50,000. How much is the amount paid/received by Giant?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Energetic, Fierce and Giant are partners with capital balances on January 2, 2021 of P350,000, P525,000 and P700,000, respectively. Their profit ratio and capital interest ratio is 5:3:2. On July 1, 2021, Humble was admitted by the partnership for 20% interest in capital and in profits by contributing P200,000 cash, and the old partners agree to bring their capital to their profit interest sharing ratio. The partnership had net income of P200,000 before admission of Humble and the partners agree to revalue its overvalued equipment by P50,000.
How much is the amount paid/received by Giant?
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