Problem #2 Partners Lazaro, Mario, Nestor and Orlando share profits in the ratio of 40%, 30%, 15% and 15%, respectively. The partnership agreement provides that in the event of the death of a partner, the firm shall continue until the end of the fiscal period. Profits shall be considered to have earned proportionately during the period and the deceased partner's capital shall be adjusted by his share of the profit or loss to the date of death. From the date of death until the date of settlement with the estate there shall be added interest of 10% computed on the adjusted capital. The remaining partners shall continue to divide profits in the old ratio. Payment to the estate shall be made within two years from the date of the partner's death. As of January 1, 2019, the capital balances of the partners were as follows: Lazaro P 84,000 Mario 75,000 48,000 45,000 Nestor Orlando P252,000 Orlando died on September 30, 2019. The books of the partnership were closed as of December 31, ariving at a credit balance of P45,000 for the Income and Expense Summary Account.
Problem #2 Partners Lazaro, Mario, Nestor and Orlando share profits in the ratio of 40%, 30%, 15% and 15%, respectively. The partnership agreement provides that in the event of the death of a partner, the firm shall continue until the end of the fiscal period. Profits shall be considered to have earned proportionately during the period and the deceased partner's capital shall be adjusted by his share of the profit or loss to the date of death. From the date of death until the date of settlement with the estate there shall be added interest of 10% computed on the adjusted capital. The remaining partners shall continue to divide profits in the old ratio. Payment to the estate shall be made within two years from the date of the partner's death. As of January 1, 2019, the capital balances of the partners were as follows: Lazaro P 84,000 Mario 75,000 48,000 45,000 Nestor Orlando P252,000 Orlando died on September 30, 2019. The books of the partnership were closed as of December 31, ariving at a credit balance of P45,000 for the Income and Expense Summary Account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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