On June 30, the balance sheet for the partnership of Williams, Brown and Lowe together with their respective profit and loss ratios was as follows: Assets, at cost P300,000 Williams, loan P 15,000 Williams, capital (20%) 70,000 Brown, capital (20%) 65,000 Lowe, capital (60%) 150,000 Total P300,000 Williams has decided to retire from the partnership and by mutual agreement the assets are to be adjusted to their fair value of P360,000 at June 30. It was agreed that the partnership would pay Williams P102,000 cash for his partnership interest exclusive of his loan which is to be repaid in full. No goodwill is to be recorded in this transaction. After William's retirement what are the capital account balances of Brown and Lowe, respectively? a. P65,000 and P150,000. b. P72,000 and P171,000. c. P73,000 and P174,000. d. P77,000 and P186,000.
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, the
Assets, at cost P300,000
Williams, loan P 15,000
Williams, capital (20%) 70,000
Brown, capital (20%) 65,000
Lowe, capital (60%) 150,000
Total P300,000
Williams has decided to retire from the partnership and by mutual agreement the assets are to be adjusted to their fair value of P360,000 at June 30. It was agreed that the partnership would pay Williams P102,000 cash for his partnership interest exclusive of his loan which is to be repaid in full. No
a. P65,000 and P150,000.
b. P72,000 and P171,000.
c. P73,000 and P174,000.
d. P77,000 and P186,000.
please help me understand my activity and I hope you include the computations so that I can understand
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