On May 1, 2022, AA and BB formed a partnership, agreeing to share profits and losses in the ratio of 2:4, respectively. AA invested a portion of land, acquired at P300,000, which was sold immediately at P500,000. BB invested cash of P1 million. How much should be the capital balance of AA right after the partnership formation? O P1,000,000 P500,000

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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On May 1, 2022, AA and BB formed a partnership, agreeing to share profits and losses
in the ratio of 2:4, respectively. AA invested a portion of land, acquired at P300,000,
which was sold immediately at P500,000. BB invested cash of P1 million. How much
should be the capital balance of AA right after the partnership formation?
O P1,000,000
O P500,000
OP300,000
O P400,000
Transcribed Image Text:On May 1, 2022, AA and BB formed a partnership, agreeing to share profits and losses in the ratio of 2:4, respectively. AA invested a portion of land, acquired at P300,000, which was sold immediately at P500,000. BB invested cash of P1 million. How much should be the capital balance of AA right after the partnership formation? O P1,000,000 O P500,000 OP300,000 O P400,000
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