The capital account for the partnership A and B at October 31, 2011 are as follows: A, capital P80,000 and B, capital P40,000. The partners share profits and losses in the ratio of 3:2 respectively. The partnership is in desperate need of cash, and the partners agree to admit C as a partner with one-third interest in the capital and profits and losses upon his investment of P30,000. Immediately after C’s admission what should be the capital balances of A, B and C, respectively assuming bonus method is used.

The capital account for the partnership A and B at October 31, 2011 are as follows: A, capital P80,000 and B, capital P40,000. The partners share profits and losses in the ratio of 3:2 respectively. The partnership is in desperate need of cash, and the partners agree to admit C as a partner with one-third interest in the capital and profits and losses upon his investment of P30,000. Immediately after C’s admission what should be the capital balances of A, B and C, respectively assuming bonus method is used.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...

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