In the early part of 2020, the partners of Manuel, Benjamin, and Solomn went to local accountant seeking assistance. They had begun a new business in 209 but had never previously used the services of accountant. Manuel and Benjamin began the partnership by contributing P 80,000 and P30,000 in cash, respectively. Manuel was to work occasionally at the business whereas Benjamin would be employed full time. They decided that year-end profits and losses should be assigned as follows: - Each partner was to be allocated 10 percent interest computed on the beginning capital balance for the period. - A compensation allowance of P5,000 was to go to Manuel with P20,000 amount assigned to Benjamin. - Any remaining income would be split on a 4:6 basis to Manuel and Bejamin respectively. In 2019, revenues totalled P90,000 with expenses reported as P64,000 (not including the compensation allowance assigned to the partners). Manuel withdrew cash of P8,000 during the year while Benjamin took out P11,000. In addition, P5,000 for repairs made to Manuel's home was paid by the business and charged to repair expense. On January 1, 2020, a 20 percent interest in the partnership was sold to Solomin for P43,000 cash. This money was contributed to the business with bonus method used for accounting purposes. Determine the capital balance of Benjamin on January 1, 2020, immediately after the admission of Solomon.
In the early part of 2020, the partners of Manuel, Benjamin, and Solomn went to local accountant seeking assistance. They had begun a new business in 209 but had never previously used the services of accountant. Manuel and Benjamin began the
- Each partner was to be allocated 10 percent interest computed on the beginning capital balance for the period.
- A compensation allowance of P5,000 was to go to Manuel with P20,000 amount assigned to Benjamin.
- Any remaining income would be split on a 4:6 basis to Manuel and Bejamin respectively.
In 2019, revenues totalled P90,000 with expenses reported as P64,000 (not including the compensation allowance assigned to the partners). Manuel withdrew cash of P8,000 during the year while Benjamin took out P11,000. In addition, P5,000 for repairs made to Manuel's home was paid by the business and charged to repair expense.
On January 1, 2020, a 20 percent interest in the partnership was sold to Solomin for P43,000 cash. This money was contributed to the business with bonus method used for accounting purposes. Determine the capital balance of Benjamin on January 1, 2020, immediately after the admission of Solomon.
Step by step
Solved in 2 steps with 2 images
