Exercise 3. 6 Messrs. E, F and G formed a partnership to engage in the business of merchandising. Contributions of capital were P500,000 by E, P300,000 by F, and P200,000 by G. The partnership agreement provided for distribution of net income or net loss at 50% to E, 30% to F and 20% to G. The partnership had a net income of P700,000 in 2017. Prepare the journal entry for the distribution of loss.
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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