The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share profits and losses 30:70, respectively. The agreement further provides that the partners should have a 70:30 capital ratio. Questions: How much is the capital credited to A upon formation? How much is the capital credited to B upon formation? Show solutions.
The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share profits and losses 30:70, respectively. The agreement further provides that the partners should have a 70:30 capital ratio. Questions: How much is the capital credited to A upon formation? How much is the capital credited to B upon formation? Show solutions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share
Questions:
How much is the capital credited to A upon formation?
How much is the capital credited to B upon formation?
Show solutions.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education