Problem 2 Admission by Investment of Assets Partners Gonzaga and Frias have capital account balances of Php 300,000 and Php 200,000 respectively, and they share income and losses in a 3:1 ratio. Required: Prepare the journal entries to record the admission of Ortiz under each of the following independent conditions: Ortiz invested Php 300,000 for a one-fourth interest in net assets; the total partnership after Ortiz’s admission will be Php 800,000.
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.
Problem 2 Admission by Investment of Assets
Partners Gonzaga and Frias have capital account balances of Php 300,000 and Php 200,000 respectively, and they share income and losses in a 3:1 ratio.
Required:
Prepare the
Ortiz invested Php 300,000 for a one-fourth interest in net assets; the total partnership after Ortiz’s admission will be Php 800,000.
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