The partner’s capital (income-sharing ratio in parentheses) of Rivadelo, Del Mundo, Galvan and Samson on May 31, 2018, was as follows: Rivadelo (20%) P 60,000 Del Mundo (20%) 80,000 Galvan (20%) 70,000 Samson (40%) 40,000 Total Partners’ Capital P 250,000 On May 31, 2018, with the consent of Rivadelo, Del Mundo, and Samson: Galvan retired from the partnership and was paid P50,000 cash in full settlement of his interest in the partnership. Mamitag was admitted to the partnership with a P20,000 cash investment for a 10% interest in the net assets of the partnership. No goodwill will be recognized. Prepare the journal entries to record the foregoing events.
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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