The capital accounts of the Maniquiz and Monte Partnership on Sept 30, 2018, were: Maniquiz Capital (75% Profit Percentage) P 140,000 Monte, Capital (25% profit percentage) 56,000 Total P 196,000 On Oct 1. Galang was admitted to a 35% interest in the partnership when he purchased 35% of each existing partner’s capital for P 100,000, paid directly to Maniquez and Monte. Required: Determine the capital balances of Maniquiz, Monte, and Galang after Galang’s admission to the partnership.
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 accounts of the Maniquiz and Monte Partnership on Sept 30, 2018, were:
Maniquiz Capital (75% Profit Percentage) P 140,000
Monte, Capital (25% profit percentage) 56,000
Total P 196,000
On Oct 1. Galang was admitted to a 35% interest in the partnership when he purchased 35% of each existing partner’s capital for P 100,000, paid directly to Maniquez and Monte.
Required:
Determine the capital balances of Maniquiz, Monte, and Galang after Galang’s admission to the partnership.
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