Entity X obtains control over a join arrangement for an investment of P220,000. The investment gives Entity X 40% interest on the net assets of the arrangement. The joint arrangement earns profit of P1,800,00 and distributes earnings of P500,000 to the owners
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.
1. Compute for the income from investment of Entity X
2. Compute for the balance of Investment account of the joint venture, for the end of the year
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