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What should be the capital balances of A

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Reference no: EM132620922

D wants to purchase one-fourth interest in the partnership of A, B, and C. The three partners agree to sell A one-fourth of their respective capital and profit and loss interests in exchange for a total payment of P 40,000.

The partner's capital accounts and the profit and loss ratio immediately before the admission of D are as follows:

                        Capital Accounts                       Profit and Loss Ratio

A                      P 80,000                                   60%

B                         40,000                                   30%

C                         20,000                                    10%

Problem 1: All assets and liabilities are fairly valued and implied goodwill is to be recorded upon the admission of D. Immediately after D's admission, what should be the capital balances of A, B, and C respectively?

Reference no: EM132620922

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