The capital accounts for the partnership of Luke and Mark at October 31, 2022 are as follows: Luke, capital 80,000 Mark, capital 40,000 TOTAL 120,000 The partnership share profits and losses in the ratio of 6:4 respectively. The partnership is in desperate need of cash, and the partners agree to admit John as a partner with a 1/3 interest in the capital and profits and losses upon his investment of P30,000. If bonus is recorded: The capital credited to John is _____ What should be the capital balance of Luke immediately after the admission of John _____
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.
Luke, capital 80,000
Mark, capital 40,000
TOTAL 120,000
The partnership share
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