The equity accounts of the partnership of KARDO and DIANA At March 31, 2016 are as follows: KARDO, capital $ 512,000 DIANA, capital 256,000 KARDO, loan (credit) 48,000 DIANA, loan (debit) 24,000 The partners share profits and losses in the ratio of 3:2, respectively. The partnership is in desperate need of cash, and the partners agree to admit JACK as a partner with a 1/3 interest in the capital and profits and losses upon his investment of 192,000. Required: Choose the correct answer with solution. 1. Immediately after JACK's admission, what should be the capital balances of KARDO, DIANA, and JACK, respectively: a. $598,000; $222,000; $410,000 b. $480,000; $480,000; $480,000 c. $544,000; $256,000; $ 400,000 d. $435,200; $204,800; $ 320,000
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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