How much is the cash settlement to vvv

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Reference no: EM132988962

Question - Erica and Paul, having capital balances of P980,000 and P525,000 respectively, decided to admit Jessica into their partnership. Jessica is to invest sufficient amount in order to have a 25% interest in the partnership. If Erica and Paul share profit in a proportion of 3:1 respectively, and Paul's capital balance after Jessica's investment is P589,750, how much was invested by Jessica?

On January 2, 2020, TTT, UUU and VVV formed a partnership with capital contribution of P625,000; P750,000 and P937,500 respectively. The partners agreed that profit and loss would be allocated as follows:- P75,000 salary to each partner.

- 3% interest on initial capital contributions.

- The remainder divided in the ratio 2:2:4, respectively.

The partnership generated income amounting to P375,000 for the year 2020. Errors were discovered before the distribution of profit:

- A purchase of piece of equipment costing P50,000 was expensed. The equipment has an estimated life of ten years with equal service potential each year.

- On December 31, 2020, ending inventory was understated by P50,000.

On January 2, 2021, VVV decided to retire from the partnership.

How much is the correct partnership income?

Using the same information in Number 16, how much is the share of UUU in the partnership income?

Using the same information in Number 16 and if the capital balance of TTT after retirement amounts to P770,000, how much is the cash settlement to VVV for his retirement?

Reference no: EM132988962

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