Y admits Z for a partnership in his business. The balance sheet accounts of Y on November 30, 2023 prior to admission of Z are as follows: DR CR Cash ? Accounts receivable 336,000 Inventory 504,000 Accounts Payable 173,600 Y, capital ? It is agreed that for purpose of establishing Y’s interest, the following adjustments should be made: An allowance for doubtful accounts of 2% of accounts receivable is to be established The inventory is to be valued at P560,000 Prepaid expenses of 18,200 and accrued expenses of 11,200 are to be recognized. Y invested cash of 397,740 to give him 1/3 interest in the total capital of the firm. What is the capital balance of Y before admission of Z? (ANSWER IS 739,200 I need solution.)
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.
Y admits Z for a
|
|
DR |
CR |
|
Cash |
? |
|
|
|
336,000 |
|
|
Inventory |
504,000 |
|
|
Accounts Payable |
|
173,600 |
|
Y, capital |
|
? |
It is agreed that for purpose of establishing Y’s interest, the following adjustments should be made:
- An allowance for doubtful accounts of 2% of accounts receivable is to be established
- The inventory is to be valued at P560,000
- Prepaid expenses of 18,200 and accrued expenses of 11,200 are to be recognized.
Y invested cash of 397,740 to give him 1/3 interest in the total capital of the firm. What is the capital balance of Y before admission of Z?
(ANSWER IS 739,200 I need solution.)
Step by step
Solved in 2 steps with 2 images
