The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share profits and losses 30:70, respectively. The agreement further provides that the partners should have a 70:30 capital ratio. How much is the capital credited to A and B upon formation?

The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share profits and losses 30:70, respectively. The agreement further provides that the partners should have a 70:30 capital ratio. How much is the capital credited to A and B upon formation?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of A and B was formed on January 1, 2021. On this date, A invested PHP200,000 cash and office equipment with a fair value of PHP80,000. B invested PHP220,000 cash, merchandise valued at PHP150,000, and furniture valued at PhHP150,000 subject to a note payable of PHP100,000, which the partnership assumes. The partnership provides that A and B share profits and losses 30:70, respectively. The agreement further provides that the partners should have a 70:30 capital ratio. Questions: How much is the capital credited to A upon formation? How much is the capital credited to B upon formation? Show solutions.
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