The following balances as at October 31, 2016 for the Partnership of Wilma, Xelyn, and Yska were as follows: Cash $80,000 Xelyn, loan 24,000 Non-cash assets 640,000 Totals $744,000 Liabilities $24,000 Wilma, loan 36,000 Wilma, capital 168,000 Xelyn, capital 156,000 Yska, capital 360,000 Totals $744,000 Wilma has decided to retire from the partnership on October 31. Partners agreed to adjust the non-cash assets to their fair market value of $784,000. The estimated profit to October 31 is $160,000. Wilma will be paid $276,800 for her partnership interest inclusive of her loan which is to be paid in full. Their profit and loss ratio is 3:4:3 to Wilma, Xelyn and Yska, respectively. Required: 1. What will be the balance of Xelyn capital account after the retirement of Wilma.
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.
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