Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes $7500 cash and merchandise inventory with a cost of $1,200 and a market value of $1500, and accounts payable valued at $800. While journalizing this transaction _________. A) Tim, Capital will be debited for $8,200 B) Tim. Capital will be credited for $8,200 C) Tim. Capital will be credited for $8,700 D) Tim capital will be debited for $6,000 and Michelle Capital will be debited for $4,50
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.
Tim and Michelle have decided to form a
A) Tim, Capital will be debited for $8,200
B) Tim. Capital will be credited for $8,200
C) Tim. Capital will be credited for $8,700
D) Tim capital will be debited for $6,000 and Michelle Capital will be debited for $4,500
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