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Handout Accounting for Partnerships A. Adding a Partner At February 15, 2023 the capital balances and the profit/loss ratios in the DDD partnership were as
Handout
Accounting for Partnerships
A. Adding a Partner
At February 15, 2023 the capital balances and the profit/loss ratios in the
DDD partnership were as follows.
Partners
Donaldson, D.
Drapier, S.
Dong, N.
Capital
Balance
$ 125,000
100,000
75,000
$ 300,000
Profit/ Loss
Ratio
50%
40%
30%
The next day, on February 16, 2023, S. Dharma is admitted to the partnership for 10% share capital by investment. After Dharma's admission, the total partnership capital is $340,000.
Required: Answer the following questions.
- How much was Dharma's cash investment in the partnership?
- What was the total bonus allocated to the old partners?
- What is the balance in each partner's capital account after Dharma's admission to the partnership?
Handout
Accounting for Partnerships
A. Adding a Partner
At February 15, 2023 the capital balances and the profit/loss ratios in the
DDD partnership were as follows.
Partners
Donaldson, D.
Drapier, S.
Dong, N.
Capital
Balance
$ 125,000
100,000
75,000
$ 300,000
Profit/ Loss
Ratio
50%
40%
30%
The next day, on February 16, 2023, S. Dharma is admitted to the partnership for 10% share capital by investment. After Dharma's admission, the total partnership capital is $340,000.
Required: Answer the following questions.
- How much was Dharma's cash investment in the partnership?
- What was the total bonus allocated to the old partners?
- What is the balance in each partner's capital account after Dharma's admission to the partnership?
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