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Question - Assume that A and B share profits and losses 60:40. C is to be as a partner by contributing cash to the firm. The capital balances of A and B before the admission of C are as follows:
A, Capital P26,000
B, Capital 10,000
Required - Show a table showing the equity structure under each of the following cases:
Case 1. Bonus to new partner. C invests P10, 000 for a one-fourth interest in the new partnership.
Case 2. Bonus to old partners. C invests P10, 000 for a 20% interest in the new partnership.
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