Answered: Lou and Sanchez sell electronic…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...

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Lou and Sanchez sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Minie to the partnership. Lou's capital P100,000 while Sanchez's capital is P80.000 and they share income in a ratio of 32. Lou and Sanchez agree that some of the inventory s obsolete worth 24,000. The inventory account is Secreased before Mine is admitted Minie investest P52,00p for a one- fourth interes What is the capital balance of Lou after adjustment but before admission of the new partner

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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