TM and SJ, having capital balances of P980,000 and P525,000 respectively, decided to admit GD into their partnership. GD is to invest sufficient amount in order to have a 25% interest in the partnership. If TM and SJ share profit in a proportion of 3:1 respectively, and SJ’s capital balance after GD’s investment is P589,750. How much was invested by GD?
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.
TM and SJ, having capital balances of P980,000 and P525,000 respectively, decided to admit GD into their
Step by step
Solved in 2 steps
