The capital account for the partnership of N and Q at Oct. 31, 2021 follows: N, Capital-------- 80 ,000 Q, Capital------- 40, 000 Total -------------- 120, 000 The partners share profits and losses in the ratio of 6:4, respectively. The partnership is in desperate need of cash, and the partners agreed to admit S as a partner with a 1/3 interest in the capital and profits and losses upon her investment of 30, 000. Immediately after admission, what should be the capital balances of N, Q, and S, respectively, assuming bonus is not to be recognized. *
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.
The capital account for the
N, Capital-------- 80 ,000
Q, Capital------- 40, 000
Total -------------- 120, 000
The partners share
Immediately after admission, what should be the capital balances of N, Q, and S, respectively, assuming bonus is not to be recognized. *
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