On December 31, 2030, the Statement of Financial Position of ABC Partnership provided the following data with profit or loss ratio of 1:6:3: Current Assets P2,000,000 Total Liabilities P1,200,000 Noncurrent Assets 24,000,000 A, Capital 1,800,000 B, Capital 1,600,000 C, Capital 1,400,000 On January 1, 2031, D is admitted to the partnership by purchasing 40% of the capital interest of B at a price of P1,000,000. What is the capital balance of B after the admission of D on January 1, 2031
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, 2030, the
following data with profit or loss ratio of 1:6:3:
Current Assets P2,000,000 Total Liabilities P1,200,000
Noncurrent Assets 24,000,000 A, Capital 1,800,000
B, Capital 1,600,000
C, Capital 1,400,000
On January 1, 2031, D is admitted to the partnership by purchasing 40% of the capital interest of
B at a price of P1,000,000.
What is the capital balance of B after the admission of D on January 1, 2031?
a. P1,180,000
b. P960,000
c. P840,000
d. P600,000
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