The following condensed statement of financial position is presented for the partnership of Morales, Gamino, and Quito, who share profits and losses in the ratio of 4:3:3, respectively. Cash 40,000 Accounts Payable 150,000 Other assets 710,000 Morales, capital 260,000 Gamino, capital 180,000 Quito, capital 160,000 Total assets 750,000 Total Liabilities & Capital 750,000 Assume that the partnership decided to admit abello as a new partner with a one fourth interest. Required: For each of the following independent cases, determine the amount that abello must contribute in cash or other assets. 1. No goodwill or bonus will be recorded. 2. A bonus of P24,000 is to be paid by abello and allocated to the prior partners. 3. The partners agreed that total resulting capital should be P820,000 and no goodwill should 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 following condensed
Cash 40,000 Accounts Payable 150,000
Other assets 710,000 Morales, capital 260,000
Gamino, capital 180,000
Quito, capital 160,000
Total assets 750,000 Total Liabilities & Capital 750,000
Assume that the partnership decided to admit abello as a new partner with a one fourth interest.
Required:
For each of the following independent cases, determine the amount that abello must contribute in cash or other assets.
1. No
2. A bonus of P24,000 is to be paid by abello and allocated to the prior partners.
3. The partners agreed that total resulting capital should be P820,000 and no goodwill should be recognized.
4. Other assets are written down by P20,000 and a bonus of P40,000 is paid to abello at the time of admission
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