C, D and E are partners with capital balances of ₱300,000 and ₱200,000, respectively, on December 31, 20x1. Profits are shared equally. E wishes to withdraw and it is agreed that she is to take certain furniture and fixtures with second hand value of ₱50,000 and a note for the balance of her interest. The furniture and fixtures are carried in the books at ₱65,000. Brand new, the furniture and fixtures may cost ₱80,000. E’s acquisition of the second-hand furniture will result to: A. Reduction in capital of ₱10,000 for E. B. Reduction in capital of ₱15,000 each for C and D. C. Reduction in capital of ₱5,000 each for C and D and E. D. Reduction in capital of ₱7,500 each for C and D.
C, D and E are partners with capital balances of ₱300,000 and ₱200,000, respectively, on December 31, 20x1. Profits are shared equally. E wishes to withdraw and it is agreed that she is to take certain furniture and fixtures with second hand value of ₱50,000 and a note for the balance of her interest. The furniture and fixtures are carried in the books at ₱65,000. Brand new, the furniture and fixtures may cost ₱80,000. E’s acquisition of the second-hand furniture will result to: A. Reduction in capital of ₱10,000 for E. B. Reduction in capital of ₱15,000 each for C and D. C. Reduction in capital of ₱5,000 each for C and D and E. D. Reduction in capital of ₱7,500 each for C and D.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 4CE
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Question
C, D and E are partners with capital balances of ₱300,000 and ₱200,000, respectively, on December 31, 20x1. Profits are shared equally. E wishes to withdraw and it is agreed that she is to take certain furniture and fixtures with second hand value of ₱50,000 and a note for the balance of her interest. The furniture and fixtures are carried in the books at ₱65,000. Brand new, the furniture and fixtures may cost ₱80,000. E’s acquisition of the second-hand furniture will result to:
A. Reduction in capital of ₱10,000 for E.
B. Reduction in capital of ₱15,000 each for C and D.
C. Reduction in capital of ₱5,000 each for C and D and E.
D. Reduction in capital of ₱7,500 each for C and D.
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