Answered: VINCENT and VAN are partners with…

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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VINCENT and VAN are partners with capital account balances of P120,000 and P180,000, respectively They divide the profits based on their capital balances. The partnership agreed to admit GO as a partner with a 1/3 interest in capital and profits, after an agreed revaluation of the partnership's assets, for his investment of P200,000. The capital balance of VINCENT after revaluation of assets and admission of GO is

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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