Partners Restituto and Buenaventura have capital balances of Php 1,000,000 and Php 400,000 and share income in a ratio of 4:1 respectively. Tiburcio will be admitted into the partnership with a 20 percent interest in the business. Required: Prepare the journal entries to record the admission of Tiburcio for each of the following independent situations: 1. Tiburcio invested Php 600,000 and goodwill will be recognized. 2. Tiburcio invested Php 600,000. Total capital will be Php 2,000,000. 3. Tiburcio purchased the 20 percent interest by paying Restituto Php 220,000 and Buenaventura Php 110,000. 4. Tiburcio invested Php 320,000. The total capital will be Php 1,720,000. 5. Tiburcio invested Php 320,000. And goodwill will be recognized.
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.
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