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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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