The partner's capital accounts in AB partnership before the admission of a new partner are as follows: CAPITAL ACCOUNTS P/L Ratios A, Capital 200,000 60% B, Capital 120,000 40% After C purchases 1/3 of A's and B's capital interests in the partnership for 120,000. How much is B's capital balance after the admission of C and how much is the total gain (loss) that is recognized in the partnership's books. How much is the total equity of the partnership after the admission of C?
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 partner's capital accounts in AB partnership before the admission of a new partner are as follows:
CAPITAL ACCOUNTS P/L Ratios
A, Capital 200,000 60%
B, Capital 120,000 40%
After C purchases 1/3 of A's and B's capital interests in the partnership for 120,000. How much is B's capital balance after the admission of C and how much is the total gain (loss) that is recognized in the partnership's books.
How much is the total equity of the partnership after the admission of C?
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