PP contributed 24,000 and CC contributed 48,000 to form a partnership and they agreed to share profits in the ratio of their original capital contributions. During the first year of operations, they made a profit of 16,290. PP withdrew 5,050 and CC 8,000. At the start of the following year, they agreed to admit GG into the partnership. He was to receive a1/4 interest in the capital and profits upon payment of 30,000 to PP and CC whose capital accounts were reduced by transfers to GG’s capital account of amounts sufficient to bring them back to their original capital ratio. How should the 30,000 paid by Gg be divided between PP and CC? a. PP 9,825; CC 20,175 b. PP 15,000; CC 15,000 c. PP 10,000; CC 20,000 d. PP 9,300; 20,700
PP contributed 24,000 and CC contributed 48,000 to form a
profits in the ratio of their original capital contributions. During the first year of operations, they
made a profit of 16,290. PP withdrew 5,050 and CC 8,000. At the start of the following year, they
agreed to admit GG into the partnership. He was to receive a1/4 interest in the capital and profits
upon payment of 30,000 to PP and CC whose capital accounts were reduced by transfers to GG’s
capital account of amounts sufficient to bring them back to their original capital ratio. How should
the 30,000 paid by Gg be divided between PP and CC?
a. PP 9,825; CC 20,175
b. PP 15,000; CC 15,000
c. PP 10,000; CC 20,000
d. PP 9,300; 20,700
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