Answered: Lala and Lila are partners sharing…

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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Lala and Lila are partners sharing profits and losses in the ratio of 6:4 respectively. On January 2, the partners decided to admit Lulu as a new partner upon her investment of P16,000. On this date, the interest in the partnership of Lala and Lila are as follows: Lala, P23,000 and Lila, Pl8,600. Assuming the new partner is given a one-third interest in the firm and the assets are revalued.

What is the capital balances of the partners after the admission of Lulu?

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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