The balance sheet of partnership of Johnny Tan, Eduardo Chua, and Karol Benito on December 31, 2020, when the partners decided to liquidate showed the following: Assets Cash Other Assets Total P180,000 500,000 P680,000 Liabilities & Capital Liabilities Tan, Loan Tan, Capital (30%) Chua, Capital (40%) Benito, Capital (30%) Total P150,000 80,000 185,000 45,000 220,000 P680,000 Cash is distributed as it becomes available. At the end of the liquidation process, total liquidation expenses incurred and paid amounted to P75,000. Other assets are realized as follows:
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.
Step by step
Solved in 5 steps with 4 images
