On June 30, 2030, the statement of financial position for the partnership of XYZ, together with their respective profit and loss ratio, were as follows: Assets, at carrying value P 360,000 XXX, loan 18,000 XXX, capital (20%) 84,000 YYY, capital (20%) 78,000 ZZZ, capital (60%) 180,000 360,000 XXX had decided to retire from the partnership. By mutual agreement, the assets are to be adjusted to their fair value of P432,000 at June 30, 2030. It was agreed that the partnership would pay XXX P122,400 cash for his interest in the partnership, including XXX’ loan which is to be repaid in full. After XXX’ retirement, what is the balance of YYY capital account? A. 78,000 B. 90,900 C. 92,400 D. 72,900
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 June 30, 2030, the
with their respective
Assets, at carrying value P 360,000
XXX, loan 18,000
XXX, capital (20%) 84,000
YYY, capital (20%) 78,000
ZZZ, capital (60%) 180,000
360,000
XXX had decided to retire from the partnership. By mutual agreement, the assets are to be adjusted to their fair value of P432,000 at June 30, 2030. It was agreed that the partnership would pay XXX P122,400 cash for his interest in the partnership, including XXX’ loan which is to be repaid in full. After XXX’ retirement, what is the balance of YYY capital account?
A. 78,000 B. 90,900 C. 92,400 D. 72,900
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