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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 a profit and loss ratio of 1:3:6. On January 1, 2021, C retired from the partnership and received P350,000. At the time of C’s retirement, the assets of the partnership are undervalued and revaluation is necessary.    What is the capital balance of B after the retirement of C? 375,000 537,500 525,000 562,500

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 a profit and loss ratio of 1:3:6. On January 1, 2021, C retired from the partnership and received P350,000. At the time of C’s retirement, the assets of the partnership are undervalued and revaluation is necessary.    What is the capital balance of B after the retirement of C? 375,000 537,500 525,000 562,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 a profit and loss ratio of 1:3:6. On January 1, 2021, C retired from the partnership and received P350,000. At the time of C’s retirement, the assets of the partnership are undervalued and revaluation is necessary. 

 

  1. What is the capital balance of B after the retirement of C?
  • 375,000
  • 537,500
  • 525,000
  • 562,500

 

  1. What is the capital balance of A after the retirement of C?
  • 537,500
  • 525,000
  • 562,500
  • 375,000
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