The capital balances and the income and loss sharing ratio of the partners May, Jun, and Julie are as follows: Capital P/L Ratio May P195,000 40% Jun 155,000 30% Julie 130,000 30% The partnership has been successful, and the partners have decided to invite April to join the partnership. April will purchase one-fourth of the capital interests of May and Jun after recognizing that P5,000 worth of accounts receivables of the partnership is worthless and cannot be collected anymore. How much is the total amount of cash paid by April to partners May and Jun?
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.
Step by step
Solved in 2 steps with 2 images
