The partnership of Jenson, Smith, and Hart share profits and losses in the ratio of 5:3:2, respectively. The partners voted to dissolve the partnership when its assets, liabilities, and capital were as follows: Assets Cash P 40,000 Other assets Liabilities and Capital 210,000 P250,000 Liabilities P 60,000 Jenson, Capital 48,000 Smith, Capital 72,000 Hart, Capital 70,000 P 2500 The partnership will be liquidated over a prolonged period of time. As cash is available it will be distributed to the partners. The first sale of noncash assets having a book value of P120,000 realized P90,000. How much cash should be distributed to each partner after this sale? a. Jenson P0; Smith P28,800; Hart P41,200. b. Jenson P0; Smith P30,000; Hart P40,000. c. Jenson P35,000; Smith P21,000; Hart P14,000. d. Jenson P45,000; Smith P27,000; Hart P18,000.
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 partnership of Jenson, Smith, and Hart share
profits and losses in the ratio of 5:3:2, respectively. The partners voted to dissolve the partnership when its assets, liabilities, and capital were as follows:
Assets
|
Cash |
P 40,000 |
||
|
Other assets Liabilities and Capital |
210,000 P250,000 |
||
|
Liabilities |
P 60,000 |
||
|
Jenson, Capital |
48,000 |
||
|
Smith, Capital |
72,000 |
|
|
|
Hart, Capital |
70,000 |
|
|
| P 2500 |
The partnership will be liquidated over a prolonged period of time. As cash is available it will be distributed to the partners. The first sale of noncash assets having a book value of P120,000 realized P90,000. How much cash should be distributed to each partner after this sale?
a. Jenson P0; Smith P28,800; Hart P41,200.
b. Jenson P0; Smith P30,000; Hart P40,000.
c. Jenson P35,000; Smith P21,000; Hart P14,000.
d. Jenson P45,000; Smith P27,000; Hart P18,000.
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