The partnership of Chichay and Joacquin was formed on February 28, 2021. On this date, Chichay invested P100,000 cash and an office equipment valued at P175,000. Joacquin invested P80,000 cash; merchandise valued at P120,000 and Building valued at P340,000 subject to a mortgage of P40,000 which the partnership will assume. The partnership provides that Chichay and Joacquin share profits and losses in the ratio of 2:3, respectively. The agreement further provides that Chichay and Joacquin should initially have an equal interest in the partnership capital. What is Joacquin’s net investment in the partnership?
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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What is Joacquin’s net investment in the partnership?
What is Chichay’s capital balance upon formation of the partnership?
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