Which one of the following alternatives represents the new profit-sharing ratio after the admission of Mqithwa into the new partnership? A. 7:9:2 B. 2:2:1 C. 7:9:4 D. 3:1:4
Which one of the following alternatives represents the new profit-sharing ratio after the admission of Mqithwa into the new partnership? A. 7:9:2 B. 2:2:1 C. 7:9:4 D. 3:1:4
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter23: Accounting For Partnerships
Section: Chapter Questions
Problem 1CP
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Transcribed Image Text:QUESTION 1
Which one of the following alternatives represents the new profit-sharing ratio after the
admission of Mqithwa into the new partnership?
А. 7:9:2
В. 2:2:1
С. 7:9:4
D. 3:1:4
Transcribed Image Text:Given the following information for questions 1- 4:
Mrebe and Johannes are in a partnership trading as KwaQongo Farmers. The partners are
sharing profits and losses equally. On 30 July 20.1 the following information was extracted
from the accounting records of the partnership:
EXTRACT OF GIVEN INFORMATION FOR KWAQONGO FARMERS
R
Capital - Mrebe..
Capital - Johannes....
Current account - Mrebe (Cr)..
Current account - Johannes (Dr)..
124 500
110300
45400
28400
Mrebe and Johannes decided to admit Mqithwa from 1 August 20.1.
Maithwa will contribute the following to acquire a fifth of the net asset share
of the partnership
1. Cash...
2. Farming equipment worth..
21300
58000
Mrebe and Johannes agreed to relinquish 20% of their share in profits or
losses to Mqithwa in the ratio of 3:1 respectively
All other assets were revalued before admitting Mqithwa to the partnership.
A valuation loss was correctly calculated at.
44000
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