On December 31, 2020, the Statement of Financial Position of DTS Co. has the following balances: Total Assets P225,000; VM Loan P12,500; VM Capital P51,875; MR Capital P48,125 and LP Capital P112,500. The partners share profits and losses in the ratio of 25% to VM, 25% to MR, and 50% to LP. It was agreed among the partners that VM retires from the partnership and the partnership assets be adjusted to their fair value of P255,000 as of December 31, 2020. The partnership also suffered net loss of P75,000. The partnership would pay VM P54,250 cash
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
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