On December 31, 2020, the Statement of Financial Position of DEL Partnership shows the following date with profit or loss sharing of 1:3:6: Cash P5, 000,000 Total Liabilities P10, 000,000 Noncash Asset 15, 000,000 Diane 5, 000,000 Ellen 3, 000,000 Liz 2, 000,000 On January 1, 2021, Ana will be admitted to the new partnership named ADEL Partnership by investing P4, 000,000 for 30% capital interest in the new partnership which has total agreed capitalization of P20, 000,000. What is the new capital balance of Liz upon admission of Ana in ADEL Partnership? a. P4,400,000 b. P8,400,000 c. P5,600,000 d. P3,200,00
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, the
profit or loss sharing of 1:3:6:
Cash P5, 000,000 Total Liabilities P10, 000,000
Noncash Asset 15, 000,000 Diane 5, 000,000
Ellen 3, 000,000
Liz 2, 000,000
On January 1, 2021, Ana will be admitted to the new partnership named ADEL Partnership by investing P4,
000,000 for 30% capital interest in the new partnership which has total agreed capitalization of P20, 000,000.
What is the new capital balance of Liz upon admission of Ana in ADEL Partnership?
a. P4,400,000
b. P8,400,000
c. P5,600,000
d. P3,200,00
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