The partnership of Jenson, Smith, and Hart share profits and losses in the ratio of 5:3:2, respectively. The partners voted to dissolve the partnership when its assets, liabilities, and capital were as follows: Assets Cash P 40,000 Other assets 210,000 Total P250,000 Liabilities and Capital Liabilities P 60,000 Jenson, Capital 48,000 Smith, Capital 72,000 Hart, Capital 70,000 Total P250,000 The partnership will be liquidated over a prolonged period of time. As cash is available it will be distributed to the partners. The first sale of noncash assets having a book value of P120,000 realized P90,000. How much cash should be distributed to each partner after this sale?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
The partnership of Jenson, Smith, and Hart share
Assets
Cash P 40,000
Other assets 210,000
Total P250,000
Liabilities and Capital
Liabilities P 60,000
Jenson, Capital 48,000
Smith, Capital 72,000
Hart, Capital 70,000
Total P250,000
The partnership will be liquidated over a prolonged period of time. As cash is available it will be distributed to the partners. The first sale of noncash assets having a book value of P120,000 realized P90,000. How much cash should be distributed to each partner after this sale?
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