Partners Gonzaga and Magada have capital account balances of P 30, 000 and P 20, 000, respectively, and they share profits and losses in a 3:1 ratio. REQUIRED: Prepare the journal entries to record the admission of Padilla under each of the following conditions: 1. Padilla invested P 30, 000 for a one- fourth interest in net assets, the total partnership capital after Padilla’s admission will be P 80, 000. 2. Padilla invested P 30, 000, of which P 10, 000 is a bonus to Gonzaga and Magada. In conjunction with the admission of Padilla, the carrying amount of the inventories is increased by P 16, 000. Padilla’s capital account is credited for P 20, 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.
Partners Gonzaga and Magada have capital account balances of P 30, 000 and P 20, 000, respectively,
and they share
REQUIRED: Prepare the
1. Padilla invested P 30, 000 for a one- fourth interest in net assets, the total
after Padilla’s admission will be P 80, 000.
2. Padilla invested P 30, 000, of which P 10, 000 is a bonus to Gonzaga and Magada. In conjunction
with the admission of Padilla, the carrying amount of the inventories is increased by P 16, 000.
Padilla’s capital account is credited for P 20, 000.
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