Gucci and Guess are partners who share profits and losses equally. The capital accounts of Gucci and Guess have tripled in five years and at present have the following balances at P 90,000 and P 60,000, respectively. Chanel desires to join the partnership and offered to invest P 50,000 for a 1/3 interest. Gucci and Guess declined his offer but they extended a counter-offer to Chanel of P 70,000 for a 25% interest in the capital and profits and losses of the firm. If Chanel accepted their offer and bonus is recorded, what should be the capital balance of Guess after Chanel’s admission?
Gucci and Guess are partners who share profits and losses equally. The capital accounts of Gucci and Guess have tripled in five years and at present have the following balances at P 90,000 and P 60,000, respectively. Chanel desires to join the partnership and offered to invest P 50,000 for a 1/3 interest. Gucci and Guess declined his offer but they extended a counter-offer to Chanel of P 70,000 for a 25% interest in the capital and profits and losses of the firm. If Chanel accepted their offer and bonus is recorded, what should be the capital balance of Guess after Chanel’s admission?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gucci and Guess are partners who share profits and losses equally. The capital accounts of Gucci and Guess have tripled in five years and at present have the following balances at P 90,000 and P 60,000, respectively. Chanel desires to join the partnership and offered to invest P 50,000 for a 1/3 interest. Gucci and Guess declined his offer but they extended a counter-offer to Chanel of P 70,000 for a 25% interest in the capital and profits and losses of the firm. If Chanel accepted their offer and bonus is recorded, what should be the capital balance of Guess after Chanel’s admission?
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