C, P and A are sole proprietors looking to form a new partnership. C is to contribute cash of P150,000 and his delivery vehicle originally bought at P160,000 but has a second-hand value of P100,000. P is to contribute a cash amounting to P200,000 and furniture worth of P40,000 but was only acquired by P for P36,000. Partner A, whose family business is to sell computers contributed cash of P80,000 and computers and printers with a regular price of P160,000 but with cost of P140,000. CPA Partnership stipulates their P and L ratio to be 3:2:3. What are the capital balances of C, P and A respectively?

Partnership is a form of business organization under which two or partners come into an agreement to…

Answered: riginally bought at P160,000 but has a…

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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C, P and A are sole proprietors looking to form a new partnership. C is to contribute cash of P150,000 and his delivery vehicle originally bought at P160,000 but has a second-hand value of P100,000. P is to contribute a cash amounting to P200,000 and furniture worth of P40,000 but was only acquired by P for P36,000. Partner A, whose family business is to sell computers contributed cash of P80,000 and computers and printers with a regular price of P160,000 but with cost of P140,000. CPA Partnership stipulates their P and L ratio to be 3:2:3. What are the capital balances of C, P and A respectively?

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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