On January 31, 20x4, partners of Lon, Mac & Nan Partnership, hadthe following loan and capital account balances (after closing entriesfor January):Loan receivable from LonP20,000 DrLoan payable to Nan60,0o 0 CrLon, capital30,000 DrMac, capital120,000 CrNan, capital70,000 Cr The partnership's income sharing ratio was Lon, 50, Mac, 20%. AndNan, 30%. On January 31, 20x4, Ole was admitted to the partnershipfor a 20% interest in total capital of the partnership in exchange foran investment of P40,000 cash. Prior to Ole's admission, the existingpartners agreed to increase the carrying amount of the partnership'sinventories to current fair value, a P60,000 increase. The capitalaccount to be credited to Ole:PreviousNext

Capital balance after increase in fair value=160000+60000 =220000

Answered: On January 31, 20x4, partners of Lon,…

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 January 31, 20x4, partners of Lon, Mac & Nan Partnership, had the following loan and capital account balances (after closing entries for January): Loan receivable from Lon 000 Dr P20, Loan payable to Nan 60, .... 000 Cr Lon, capital 30,000 Dr Мacс, сapital 120,000 Cr Nan, capital 70,000 Cr