Juan, Pedro, and Pablo agreed on profit-sharing of 2:5:3. By the end of 2022, their respective capital balances after income distribution and profit sharing are as follows: Juan – P 90,000; Pedro – P 85,000; Pablo – P 120,000. The partners agreed to maintain their capital balance, but adjust their equity based on their profit-sharing ratio. How much cash will be distributed to/(Invested by) Pedro?
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.
Juan, Pedro, and Pablo agreed on profit-sharing of 2:5:3. By the end of 2022, their respective capital balances after income distribution and profit sharing are as follows: Juan – P 90,000; Pedro – P 85,000; Pablo – P 120,000. The partners agreed to maintain their capital balance, but adjust their equity based on their profit-sharing ratio. How much cash will be distributed to/(Invested by) Pedro?
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