Answered: A, a partner in the ABC Partnership,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A, a partner in the ABC Partnership, has a 30% participation in partnership profits and losses. A’s capital account has a net decrease of P 60,000 during the calendar year 2021. During 2021, A withdrew P130,000 (charged against his capital account) and contributed property valued at P 25,000 to the partnership. What was the net income of the ABC Partnership for 2021?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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