Partners Biore and Selisana each have a P450, 000 capital balance and share profits and losses in a 3:2 ratio, respectively. Cash equals P150, 000, non-cash assets equal P1, 500, 000, and liabilities equal P750, 000. 7. If the non-cash assets are sold for P1, 000, 000, the change in Selisana’s capital account will be a. an increase of P500, 000 b. a decrease of P250, 000 c. a decrease of P200, 000 d. an increase of P400, 000 8. If the non-cash assets are sold for P700, 000 and each partner is personally insolvent, upon liquidation Selisana will receive a cash distribution of a. P100, 000 b. P50, 000 c. P130, 000 d. P0
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.
Partners Biore and Selisana each have a P450, 000 capital balance and
share
non-cash assets equal P1, 500, 000, and liabilities equal P750, 000.
7. If the non-cash assets are sold for P1, 000, 000, the change in Selisana’s
capital account will be
a. an increase of P500, 000
b. a decrease of P250, 000
c. a decrease of P200, 000
d. an increase of P400, 000
8. If the non-cash assets are sold for P700, 000 and each partner is
personally insolvent, upon liquidation Selisana will receive a cash distribution
of
a. P100, 000
b. P50, 000
c. P130, 000
d. P0
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