Jason and Kidd are partners who share profits and losses in the ratio of 3:1, respectively. On August 1, 2017, their capital balances were: Jason - P 200,000 and Kidd -P 100,000. On this date, Scottie invests 80,000 in the firm and is given a capital credit of P 50,000 which is to be 1/8 of the capital of the new partnership. 1. What is the agreed capital of the new partnership? 2. What is the new capital balance of Jason after the admission of Scottie?
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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