A partnership had the following condensed financial position: Assets Liabilities and Capital Liabilities 5,000 Cash 15,000 Non-cash assets 65,000 A, capital (80%) 40,000 A, loan 5,000 B, capital (20%) 75,000 20,000 Total 75,000 The partners agree to admit C as a member of the partnership. Problem 1: C purchases % interest in the firm. C pays the partners P15,000 which is divided between them in proportion to the equities given up. The journal entry to admit C as a new partner would be: a. A, capital 10,000 40,000 20,000 B, capital c. A, capital B, capital 5,000 15,000 60,000 b. A, capital 12,000 d. A, capital 9,375 B, capital 3,000 B, capital 9,375 15,000 18,750 C, capital C, capital C, capital C, capital

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PB: The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a...
icon
Related questions
icon
Concept explainers
Question
A partnership had the following condensed financial position:
Assets
Liabilities and Capital
Liabilities
5,000
Cash
15,000
Non-cash assets
65,000
A, capital (80%)
40,000
A, loan
5,000 B, capital (20%)
75,000
20,000
Total
75,000
The partners agree to admit C as a member of the partnership.
Problem 1: C purchases % interest in the firm. C pays the partners P15,000 which
is divided between them in proportion to the equities given up. The journal entry to
admit C as a new partner would be:
a. A, capital
10,000
B, capital
5,000
c. A, capital
B, capital
40,000
20,000
15,000
60,000
b. A, capital
12,000
d. A, capital
9,375
B, capital
3,000
B, capital
9,375
15,000
18,750
C, capital
C, capital
C, capital
C, capital
Transcribed Image Text:A partnership had the following condensed financial position: Assets Liabilities and Capital Liabilities 5,000 Cash 15,000 Non-cash assets 65,000 A, capital (80%) 40,000 A, loan 5,000 B, capital (20%) 75,000 20,000 Total 75,000 The partners agree to admit C as a member of the partnership. Problem 1: C purchases % interest in the firm. C pays the partners P15,000 which is divided between them in proportion to the equities given up. The journal entry to admit C as a new partner would be: a. A, capital 10,000 B, capital 5,000 c. A, capital B, capital 40,000 20,000 15,000 60,000 b. A, capital 12,000 d. A, capital 9,375 B, capital 3,000 B, capital 9,375 15,000 18,750 C, capital C, capital C, capital C, capital
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 1 images

Blurred answer
Knowledge Booster
Partnership Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage