Partners Kitty and Puppy, who share equally in profits and losses, have the following balance sheet as of December 31 of the current year. Cash 120,000 Payables 172,000 Receivables 100,000 Accum Dept’n. 8,000 Inventory 140,000 Kitty, Capital 140,000 PPE 80,000 Puppy, Capital 120,000 Total 440,000 Total 440,000 They agreed to incorporate their partnership, with the new corporation absorbing the net assets after the following adjustments: provision of allowance for bad debts of P10,000; restatement of the inventory at its current fair value of P160,000; and, recognition of further depreciation on equipment of P3,000. The corporation’s capital stock is to have a par value of P100, and the partners are to be issued corresponding total shares equivalent to their adjusted capital balances. 22 How many total number of shares that were issued to the partners?
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 Kitty and Puppy, who share equally in
December 31 of the current year.
Cash 120,000 Payables 172,000
Receivables 100,000 Accum Dept’n. 8,000
Inventory 140,000 Kitty, Capital 140,000
PPE 80,000 Puppy, Capital 120,000
Total 440,000 Total 440,000
They agreed to incorporate their
following adjustments: provision of allowance for
its current fair value of P160,000; and, recognition of further
corporation’s capital stock is to have a par value of P100, and the partners are to be issued corresponding
total shares equivalent to their adjusted capital balances.
22
How many total number of shares that were issued to the partners?
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