When a new partner is admitted to a partnership. there should be a(n)

When a new partner is admitted to a partnership, there should be a(n) a. revaluation of assets b. realization of assets c. al

Answer

When A new partner admins into a partnerdhip based on their agreement Assets may be revalued to fair value. Realization and allocation of assets is done on liquidation of partnership. There is no concept of return of assets in partnership accounting therefore from the options OPTION A is Correct ————————————————————————————- Profit or Loss Sharing ratio between partners is 2:1 Income of the partnership is $132,000 Expenses are salaries to partners are total of =$60000+$42000= $102,000 Net Profit of partnership after deducting expenses =$132000 – $102000=$30000 Share the net profit in 2:1 Between partners Tanner Share = ($30000X2)/3 = $20,000 Teresa Share = ($30,000X1)/3 =$10,000 Total income to partners in the form salary and profit Tanner = $42000+$20000=$62000 Teresa = $60000+$10000 = $70,000 Therefore from the options OPTION D is correct ——————————————————————————– Capital Balances at the begining of the year is as follow Sadie capital $42000 Sam capital $58000 Net Profit of the partnership is $40000 Profit sharing ratio is Equall Sadie share od profit = $40000/2 =$20000 Sam share of profit =$40000/2 =$20000 calculation of closing capitals at the end of the year is as follows Opening Capital Balance XXX (+) Share of profit XXX (-) Withdrawls (XXX) Closing Capital Balance XXX Sams Closing Capital Balance Opening Balance $58000 (+) Share of Profit $20000 (-) Withdrawls made ($15000) Closing Capital balance $63000

Therefore from the options OPTION C is Correct

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