Accounting for Partnerships

A. Adding a Partner

At February 15, 2023 the capital balances in the DDD partnership were as follows.

Profit/Loss sharing ratio between existing partners is 5:4:3. The next day, on February 16, 2023, S. Dharma is admitted to the partnership for 10% share capital by investment of $40,000.

Required: Answer the following questions.

1. Is there a profit/loss to old partners? Calculate.

1. What was the profit/loss allocated to each of the old partners?

1. Show the capital balances of each partner after Dharmas admission.

CH12 Collaborative Learning ActivityStudent Handout

Accounting for Partnerships

B. Dropping a Partner

During the two years following the admission of Dharma, the partnership was dissolved and a new one was created when Dong retired. Now, at April 30, 2025, the partners capital balances were as follows:

The partners share profit equally. On May 1, 2025 Drapier withdrew from the partnership and is paid by the partnership firm an amount of $150000.

Required: Answer the following questions.

1. What was the bonus to the retiring or remaining partners?
2. How much bonus/loss is allocated to each of the remaining partners?Accounting for Partnerships

A. Adding a Partner

At February 15, 2023 the capital balances in the DDD partnership were as follows.

Profit/Loss sharing ratio between existing partners is 5:4:3. The next day, on February 16, 2023, S. Dharma is admitted to the partnership for 10% share capital by investment of $40,000.

Required: Answer the following questions.

1. Is there a profit/loss to old partners? Calculate.

1. What was the profit/loss allocated to each of the old partners?

1. Show the capital balances of each partner after Dharmas admission.

CH12 Collaborative Learning ActivityStudent Handout

Accounting for Partnerships

B. Dropping a Partner

During the two years following the admission of Dharma, the partnership was dissolved and a new one was created when Dong retired. Now, at April 30, 2025, the partners capital balances were as follows:

The partners share profit equally. On May 1, 2025 Drapier withdrew from the partnership and is paid by the partnership firm an amount of $150000.

Required: Answer the following questions.

1. What was the bonus to the retiring or remaining partners?
2. How much bonus/loss is allocated to each of the remaining partners?