Geego and Annie entered into a partnership agreement in which Geego is to have a 40% interest in capital and profits, while Annie is to have 60% interest in capital and profits. Geego will contribute cash and the following non cash assets: Land, cost P25,000; fair market value is P40,000; Building cost P800,000; fair market value 700,000; Equipment cost P50,000 while its fair market value is P30,000. There is a P150,000 mortgage on the Building that the partnership agrees to assume. Annie contributes P300,000 to the partnership. How much is the additional cash investment of Geego to have 60% share in the partnership.
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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