Supposing that the old partnership of A & B reported the following: Partners Capital Profit and loss ratio A P200,000 40% B 300,000 60% If C is to be admitted for 20% interest in the partnership by investing P125,000, then the new profit and loss ratio of A & B, respectively, in the new partnership, without specific agreement would be A. 60% 40% B. 32% 48% C. 40% 60% D. 48% 32%
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.
Supposing that the old partnership of A & B reported the following:
Partners Capital
A P200,000 40%
B 300,000 60%
If C is to be admitted for 20% interest in the partnership by investing P125,000, then the new profit and loss ratio of A & B, respectively, in the new partnership, without specific agreement would be
Step by step
Solved in 2 steps