On January 1,2019, Jan and Kan have capital balances of P 2,000,000 and P 2,750,000, respectively. On this day, they decided to admit Lan by making him contribute his land worth P 1,600,000 and cash of P 200,000 for a 30% interest in the partnership. Profit and loss ratio of Jan and Kan is 30:70.During 2019, the partnership incurred a net income of P 170,000. On January 1,2020, the partners agreed to admit Man for a 20% interest in the partnership by- making him pay 1,500,000 because on this date the land of the partnership is not fairly valued. The partnership earned a net income of P 120,000 for year 2020. On December 31,2020, Jàn decided to retire from the partnership and the remaining partners agreed to pay him an amount equal to the book value of his capital at the time of his retirement from the partnership. What is the balance of the capital account of Jan after the admission of Lan? answer

On January 1,2019, Jan and Kan have capital balances of P 2,000,000 and P 2,750,000, respectively. On this day, they decided to admit Lan by making him contribute his land worth P 1,600,000 and cash of P 200,000 for a 30% interest in the partnership. Profit and loss ratio of Jan and Kan is 30:70.During 2019, the partnership incurred a net income of P 170,000. On January 1,2020, the partners agreed to admit Man for a 20% interest in the partnership by- making him pay 1,500,000 because on this date the land of the partnership is not fairly valued. The partnership earned a net income of P 120,000 for year 2020. On December 31,2020, Jàn decided to retire from the partnership and the remaining partners agreed to pay him an amount equal to the book value of his capital at the time of his retirement from the partnership. What is the balance of the capital account of Jan after the admission of Lan? answer

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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Concept explainers

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.

Question

On January 1,2019, Jan and Kan have capital balances of P 2,000,000 and P 2,750,000,
respectively. On this day, they decided to admit Lan by making him contribute his land worth P
1,600,000 and cash of P 200,000 for a 30% interest in the partnership. Profit and loss ratio of
Jan and Kan is 30:70.During 2019, the partnership incurred a net income of P 170,000.
On January 1,2020, the partners agreed to admit Man for a 20% interest in the partnership by-
making him pay 1,500,000 because on this date the land of the partnership is not fairly valued.
The partnership earned a net income of P 120,000 for year 2020.
On December 31,2020, Jàn decided to retire from the partnership and the remaining partners
agreed to pay him an amount equal to the book value of his capital at the time of his
retirement from the partnership.
What is the balance of the capital account of Jan after the admission of Lan? .
Enter your answer
21
AB Partnership had a net income of P 8,000 for the month ended September 30,2019.
C purchased an interest in the AB Partnership of A and B by paying A P 32,000 for half of her
capital and half of 50% percent profit sharing interest on October 1,2019. At this time A's
capital balance was P 24,000 and B's capital balance was P 56,000. After the time of admission
of C, how much is the total partnership capital?
Enter your answer
20

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