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their original made a profit

their original made a profit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Agustin contributed P78,000 and Biag contributed P156,000 to form nartnership, and they agreed to share profits in the ratio of their original capital contributions. During the first year of operations, they made a profit of P52,942.50; Agustin withdrew P16,412.50 and Biag P26,000. At the start of the following year, they agreed to admit Carlos into the partnership. He was to receive a one-fourth interest in the capital and profits upon payment of P97,500 to Agustin and Biag, whose capital accounts were to be reduced by transfers to Carlos' capital account of amounts sufficient to bring them back to their original capital ratio. How should the P97,500 paid by Carlos be divided between Agustin and Biag. a. Agustin, P31,931.25; Biag, P65,568.75. b. Agustin, P48,750; Biag, P48,750 C. Agustin, P32,500; Biag, P65,000. d. Agustin, P30,225; Biag, P67,275
Transcribed Image Text:Agustin contributed P78,000 and Biag contributed P156,000 to form nartnership, and they agreed to share profits in the ratio of their original capital contributions. During the first year of operations, they made a profit of P52,942.50; Agustin withdrew P16,412.50 and Biag P26,000. At the start of the following year, they agreed to admit Carlos into the partnership. He was to receive a one-fourth interest in the capital and profits upon payment of P97,500 to Agustin and Biag, whose capital accounts were to be reduced by transfers to Carlos' capital account of amounts sufficient to bring them back to their original capital ratio. How should the P97,500 paid by Carlos be divided between Agustin and Biag. a. Agustin, P31,931.25; Biag, P65,568.75. b. Agustin, P48,750; Biag, P48,750 C. Agustin, P32,500; Biag, P65,000. d. Agustin, P30,225; Biag, P67,275
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