If an existing asset of ABC partnership is not properly valued, what is the capital balance of B after the admission of D? a. P1,640,000 b. P2,600,000 c. P1,920,000 d. P1,560,000
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.
On December 31, 2030, the
following data with profit or loss ratio of 1:6:3:
Current Assets P2,600,000 Total Liabilities P600,000
Noncurrent Assets 4,000,000
A, Capital 2,800,000
B, Capital 1,400,000
C, Capital 1,800,000
On January 1, 2031, D is admitted to the partnership by investing P2,000,000 to the partnership for 20% capital interest.
If an existing asset of ABC partnership is not properly valued, what is the capital balance
of B after the admission of D?
a. P1,640,000
b. P2,600,000
c. P1,920,000
d. P1,560,000
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