8. Admission of New Partner - A equity = 60,000 -B equity = 40,000 share profits and losses in a ratio of 3:2 - Admit C for $60,000 cash, 25% interest in the partnership Prepare the entry for admission of C.
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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.
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- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $ 30,000 B. $ 6,000 C. ($10,000)
- A partnership begins its first year with the following capital balances: Alfred, Capital . . . . . . . . . . . . .$ 50,000Bernard, Capital . . . . . . . . . . . . 60,000Collins, Capital . . . . . . . . . . . . . 70,000 The articles of partnership stipulate that profits and losses be assigned in the following manner:∙ Each partner is allocated interest equal to 5 percent of the beginning capital balance.∙ Bernard is allocated compensation of $18,000 per year.∙ Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.∙ Each partner is allowed to withdraw up to $5,000 cash per year.Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year? Choose the correct.a. $70,800b. $86,700c. $73,500d. $81,7002. The capital balances of partners Po and Gi are as follows:Po GiJanuary 1, Beginning P100,000 P200,000June 30, investment 50,000 -September 30, withdrawal - (100,000)Balance P150,000 P100,000Their agreement is to share profit and loss based on average capital balance. How muchis the share of Gi in the partnership’s income of P450,000?2.) XY Partnership had the following balances as of the year ended December 31, 2019. Description Partner X Partner Y 10,000 8,000 Beginning Capital Withdrawals 2,000 1,500 Additional Investments 1,200 3,000 Division of Profit/Loss 60% 40% Net income of the Partnership amounted to Php 4,000. Required: Provide a statement of Changes in Partner's Equity with complete parts 3.) xyCorporation had the following balances as of the year ended December 31, 2019. Beginning Shareholder's Equity -- Php 20,000 Share Issuances (Additional Investment) -- Php 25,000 Dividends declared (Distribution of Income) - Php 10,000 Net Income Year 2019 - Php 15,000 Required: Provide a Statement of Changes in Shareholder's Equity with complete parts
- A partnership begins its first year of operations with the following capital balances: Winston, Capital . . . . . . . . . . $110,000Durham, Capital . . . . . . . . . . . 80,000Salem, Capital . . . . . . . . . . . . 110,000 According to the articles of partnership, all profits will be assigned as follows:∙ Winston will be awarded an annual salary of $20,000 with $10,000 assigned to Salem.∙ The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year.∙ The remainder will be assigned on a 5:2:3 basis, respectively.∙ Each partner is allowed to withdraw up to $10,000 per year.The net loss for the first year of operations is $20,000 and net income for the subsequent year is $40,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston’s capital account at the end of the second year? Choose the correct.a. $102,600b. $104,400c. $108,600d. $109,200M and N admits O as a new partner. The partnership statement of financial position immediately before theadmission of C is shown below:Cash 28,000 Accounts Payable 65,000Accounts Receivable 118,000 M, Capital (70%) 172,000Inventory 187,000 N, Capital (30%) 96,000Total Assets 333,000 Total Liabilities & Equity 333,000The following adjustments are determined:a. The recoverable amount of the account receivable is P117,401.b. A P30,000 recovery of a previous write-down on the inventory should be recognized.c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized.Case # 1: O acquires half of N’s interest for P 120,000.Case # 2: O invests P 81,250 cash to the partnership in exchange for a 25% interest.Case # 2, Scenario A: O’s capital account is credited for the fair value of the 25% interest he acquired.Case # 2, Scenario B: O’s capital account is credited for P 100,000. 19. Under Case # 2, Scenario A: how much is the balance of M's capital account after…Admission by Investment with the computation of capital balances of the old partners after admission. A and B are partners in AB Partnership with the following capital balances as of October 31, prior to admission of C: A, Capital (40%) B, Capital (60%) Question 33 P60,000 C is to be admitted into the partnership by investing additional cash of P48,000 for a 25% interest. How much is the capital credited to C upon his admission in the ABC Partnership? 60,000 Question 34 In the previous problem pertaining to ABC Partnership, how much is the capital of A after the admission of C? In the previous problem pertaining to ABC Partnership, how much is the capital of B after the admission of C?
- Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $93, 000 and $ 130,000, respectively. Lewan Gorman is to be admitted to the partnership, contributing $62,000 cash to the partnership, for which he is to receive an ownership equity of $81,000. All partners share equally in income. Question Content Area a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $19,000. If an amount box does not require an entry, leave it blank. blank Cash 62,000 Lewan Gorman, Drawing 81,000 Harry Barge, Capital 19,000 Lewan Gorman, Capital 81,000 Question Content Area b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson Sfill in the blank a4bbb009305cfea_1 155,000 Harry Barge Sfill in the blank a4bbb009305 cfea_2 11,000 Lewan Gorman Sfill in the blank a4bbb009305cfea_3…The partner's capital accounts in AB partnership before the admission of a new partner are as follows: CAPITAL ACCOUNTS P/L Ratios A, Capital 200,000 60% B, Capital 120,000 40% C, purchases 1/4 of A's capital interest in the partnership. How much is the capital balance of A after the admission of C?Question # 01Abraham and Boling decided to admit a new partner Liu to a one forth equity interest in the partnership for an investment of $80,000. Prepare a general entry to record the admission of Liu. Also explain the calculation of Bonus to the existing partners or the incoming partner is computed? Abraham and Boling divide the profit and loss 60% to the Abraham and 40% to the Boling. At the present time the investment capital of each partner is $140,000.