On August 1, Isada and Ureta pooled their assets to form a partnership , with the firm to take over their business assets and assume the liabilities. Partnership capitals are to be based on net assets transferred after the following adjustments. Profits and losses are allocated equally. The inventory of Ureta is to be increased by P4,000; an allowance for doubtful accounts of P1,000 and P1,500 are to be set up in the books of Isada and Ureta, respectively and accounts payable of P4,000 is to be recognized in Isadas’ book. The individual trial balances on August, before adjustment are as follows: Isada Ureta Assets 75,000 113,000 Liabilities 5,000 34,500 What is the capital balance of Isada and Ureta after the above adjustments?
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 August 1, Isada and Ureta pooled their assets to form a
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