The capital accounts of the partnership of Erza, Carla, and Gerald on June 1, 20x9 are presented below with their respective profit and loss ratios: Erza P278,400 1/2 Carla 417,600 1/3 Gerald 192,000 1/6 On June 1, 20x9, Wendy is admitted to the partnership when Wendy purchased, for P264,000, a proportionate interest from Erza and Gerald in the net assets and profits of the partnership. As a result of a transaction, Wendy acquired a one-fifth interest in the net assets and profits of the firm. What is the combined gain realized by Erza and Gerald upon the sale of a portion of their interest in the partnership to Wendy?
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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