Partnership of Coco, Piolo, and Daniel and their profit and loss ratios were as follows: Assets $ 1,200,000 Coco, loan $ 60,000 Coco, capital (30%) 280,000 Piolo, capital (30%) 260,000 Daniel, capital (40%) 600,000 Total equities $ 1,200,000 Coco decided to retire from the partnership and by mutual agreement, the assets were adjusted to their current fair value of $1,440,000. The partnership paid $408,000 cash for Coco's equity in the partnership, exclusive of the loan which was repaid in full. Required: Choose the correct answer with solution. 1. The capital balances of Piolo and Daniel, respectively, after Coco's retirement from the partnership was: a. $360,000; $855,000 b. $288,000; $684,000 c. $300,000; $675,000 d. $308,000; $664,000
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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