The total capital balance after partnership remain same 7,500,000 (3,000,000 + 4,500,000).
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 total capital balance after
(3,000,000 + 4,500,000).
The total capital balance after partnership remain same 7,500,000
(3,000,000 + 4,500,000).
So total capital balance of partnership after admission by marshall is 7,500,000.
| Capital share of marshall will be = (7,500,000/3) = 25,00,000. | ||||||
| Percentage of marshall share in company's profit = (1/3*100) = 33.33%. |
REQUIRED:
1. What is the combined gain realized by Manuel and Marcus upon the sale of a portion of their interest in the partnership?
A. 400,000
B. 300,000
C. 200,000
D. 100,000
E. not given
2. What is the gain realized by Manuel upon the sale of a portion of his interest in the partnership to Marshall?
A. 130,000
B. 110,000
C. 100,000
D. 80,000
E. not given
3. What is the gain realized by Marcus upon the sale of a portion of his interest in the partnership to Marshall?
A. 130,000
B. 110,000
C. 100,000
D. 80,000
E. not given
Step by step
Solved in 2 steps
