Philip and Morris are partners with capital 16,000 and P 8,000, respectively. They share profits in the ratio of 60% to Philip and 40% to Morris. Camel will be admitted into the partnership by buying 1/4 the interest and earnings of both partners Istiqa for P 7,000. The old partners will divide the remaining earnings using their original profit and loss sharing ratio. The books of the old partnership will be retained. 3 alternatives consideration as follows: are under c. No goodwill will be recognized. d. The implied total goodwill will be recognized. e. The implied partial goodwill will be recognized. REQUIRED: For each alternative, a. Give the entry to record the admission of Camel.
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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