The following debit (credit) balances on the account of GYC Partnership are as follows: Gie, Capital (P1,000,000) Yan, Capital ( 1,200,000) Carl, Capital ( 800,000) Gie, Loan 100,000 Yan, Loan 300,000 Carl, Loan ( 100,000) Gie, Yan and Carl currently allocate their profits and losses based on the ratio of 3:4:3, respectively. With the consent of the remaining partners, Yan decided to retire from the partnership by selling 75% of his capital to Ben (outsider) for P750,000, and the remaining interest (including the loan) was sold to the partnership in which he received P50,000 in total. Required: Prepare journal entries regarding the partnership dissolution.
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 debit (credit) balances on the account of GYC Partnership are as follows:
Gie, Capital (P1,000,000)
Yan, Capital ( 1,200,000)
Carl, Capital ( 800,000)
Gie, Loan 100,000
Yan, Loan 300,000
Carl, Loan ( 100,000)
Gie, Yan and Carl currently allocate their
Required: Prepare
Step by step
Solved in 2 steps
