Part 2 Ronald and Donald are partners who share profits and losses in the ratio of 7:3, respectively. On October 5, 2022, their respective capital accounts were as follows: Ronald, P35,000; Donald, P30,000. On that date they agreed to admit Leonard as a partner with a 1/3 interest in the capital and profits and losses, and upon his investment of P40,000. The new partnership will begin with a total capital of P120,000. The net assets of the partnership after the admission of Leonard is ______ At what amount should Leonard’s capital be credited? ______
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 that date they agreed to admit Leonard as a partner with a 1/3 interest in the capital and profits and losses, and upon his investment of P40,000. The new partnership will begin with a total capital of P120,000.
The net assets of the partnership after the admission of Leonard is ______
At what amount should Leonard’s capital be credited? ______
Step by step
Solved in 2 steps
