Goodwill of Php 300,000 to be recorded and allocated to the prior partners. The prior partners, Balagtas, Sicat, and Par, agreed to credit Rementina for Php 100,000 of goodwill upon admission into the partnership.
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.
Problem 8 Determining a New Partner’s Investment Cost (Incentive Activity)
The following condensed
Cash
Other Assets
Total Assets
Php 400,000 7,100,000
Php 7,500,000
Accounts Payable Balagtas, Capital Sicat, Capital Par, Capital
Total Liabilities and Capital
Php 1,500,000 2,600,000 1,800,000 1,600,000 Php 7,500,000
Assume that the partnership decided to admit Rementina as a new partner with one-fourth interest.
Required:
For each of the following independent cases, determine the amount that Rementina must contribute
in cash or other assets:
-
Goodwill of Php 300,000 to be recorded and allocated to the prior partners. -
The prior partners, Balagtas, Sicat, and Par, agreed to credit Rementina for Php 100,000 of
goodwill upon admission into the partnership.
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