What amount of investment must be made by each partners

Assignment Help Accounting Basics

Reference no: EM132828082

Question - X, Y and Z have been partners throughout the year 2014. Their average balances for the year and their balances at the end of the year before closing the nominal accounts are as follows:

Average Balances Balances Dec 31, 2014

X Cr. 900,000 Cr. P600,000

Y Cr. 30,000 Dr. 10,000

Z Cr. 70,000 Cr. 100,000

The profit for 2014 is P750,000 before charging partner's drawing allowances and before interest on average balances at the agreed rate of 4% per annum. X is entitled to a drawing account credit of P100,000, Y of P70,000 and Z of P50,000 per annum. The balance of the profit is to be distributed at the rate of 60% to X, 30% to Y and 10% to Z.

The partners agreed that after credits and distribution as indicated in the proceeding paragraph, it is intended to adjust the capital accounts of partners by investing the highest amount of cash, so that the balances in the partners' accounts will be proportionate to their profit-sharing ratios. None of the partners will withdrew cash from the partnership.

What amount of investment must be made by each partners?

Reference no: EM132828082

Questions Cloud

Which of the exchanges would qualify as nontaxable : A land developer would like to trade some business assets in a nontaxable exchange. Which of the exchanges would qualify as nontaxable?

Propose alternative policies and procedures : Identify intended or unintended consequences on Mc Donald's stakeholders due to COVID19 Pandemic and recommend and propose alternative policies

How much capital loss may mmi carry forward to year : How much capital loss may MMI carry forward to year 8? MMI Corporation incurred net capital losses that amounted to $15,000.

Approach to professional education in terms of costs : Identify the advantages and disadvantages of this approach to professional education in terms of costs, educational efficiency, and patient care quality.

What amount of investment must be made by each partners : The balance of the profit is to be distributed at the rate of 60% to X, 30% to Y and 10% to Z. What amount of investment must be made by each partners

Business to business: a human-to-human approach : Title: Business to business: A human-to-human approach for creative connection

What is the character of gain or loss on the short sale : On June 19, Year 2, the individual covered and delivered the 100 shares at $8 per share. What is the character of gain or loss on the short sale?

What amount could scott claim in year income tax : Disregarding the adjusted gross income percentage threshold, what amount could Scott claim in his year 3 income tax return for medical expenses?

Compute gross profit percentage and rate of inventory : The company ended 2016 with an inventory of $232 million. Compute 007's gross profit percentage and rate of inventory turnover for 2016

User Account

All Pages