The ABC Partnership has assets with book value of P240,000 and a market value of P195,000, outside liabilities of P70,000, loans payable to Partner Abe of P20,000, and capital balances for Partners Abe, Baker, and Chapman of P70,000, P30,000 and P50,000, respectively. The partners share profits and losses equally. How would the first P100,000 of available assets be distributed?
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.
The ABC
P195,000, outside liabilities of P70,000, loans payable to Partner Abe of P20,000,
and capital balances for Partners Abe, Baker, and Chapman of P70,000, P30,000 and
P50,000, respectively. The partners share
How would the first P100,000 of available assets be distributed?
Step by step
Solved in 2 steps
