On December 31, 2020, ABC partnership’s statement of financial positions shows that A, B, and C have capital balances of P500,000, P300,000, and P200,000 with profit or loss ratio of 1:3:6. On January 1, 2021, C retired from the partnership and received P3560,000. At the time of C’s retirement, an asset of the partnership is undervalued. What is the capital balance of A after the retirement of C?
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, 2020, ABC partnership’s
What is the capital balance of A after the retirement of C?
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