Ledger balances of the OMG partnership as of May 31, 2019 are as follows: Cash P 150,000 Other Assets 1,080,000 Accounts Payable P 450,000 Olga, Capital 480,000 Mega, Capital 135,000 Giga, Capital 165,000 Profits and losses are shared 4:5:1 to Olga, Mega and Giga, respectively. If the partnership is liquidated in installments and assuming that as cash becomes available, it will be distributed to the partners; Inventory costing P 600,000 is sold for P 420,000, How much cash should be distributed to each partner at this time?
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.
Ledger balances of the OMG
Cash P 150,000
Other Assets 1,080,000
Accounts Payable P 450,000
Olga, Capital 480,000
Mega, Capital 135,000
Giga, Capital 165,000
Profits and losses are shared 4:5:1 to Olga, Mega and Giga, respectively. If the partnership is liquidated in installments and assuming that as cash becomes available, it will be distributed to the partners; Inventory costing P 600,000 is sold for P 420,000, How much cash should be distributed
to each partner at this time?
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