A B, and C have been partners for years and have been dividing the profits 2:3:3 with the following balances: DR: Cash 120,000 DR: AR 420,000 CR: ADA 25,000 DR: Inventory 580,000 DR: Vehicle 1000,000 CR: Accum. Dep'n 600,000 CR: Accounts Payable 595,000 CR: B Loan 100,000 CR: A, Capital 300,000 CR: B, Capital200,000 Cr. C, Capital 300,000 If at the first realization, P900,000 worth of net non-cash assets were sold for P480,000, how much should C receive using the Theoretical Loss Approach method? Oa 71,250 Ob. 5,000 OcO Od 35,625

A B, and C have been partners for years and have been dividing the profits 2:3:3 with the following balances: DR: Cash 120,000 DR: AR 420,000 CR: ADA 25,000 DR: Inventory 580,000 DR: Vehicle 1000,000 CR: Accum. Dep'n 600,000 CR: Accounts Payable 595,000 CR: B Loan 100,000 CR: A, Capital 300,000 CR: B, Capital200,000 Cr. C, Capital 300,000 If at the first realization, P900,000 worth of net non-cash assets were sold for P480,000, how much should C receive using the Theoretical Loss Approach method? Oa 71,250 Ob. 5,000 OcO Od 35,625

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At year-end, the Circle City partnership has the following capital balances: Manning, Capital . . . . . . . . . $130,000Gonzalez, Capital . . . . . . . . 110,000Clark, Capital . . . . . . . . . . . . 80,000Freeney, Capital . . . . . . .. . . 70,000 Profits and losses are split on a 3:3:2:2 basis, respectively. Clark decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement.If instead the partnership uses the bonus method, what is the balance of Manning’s capital account after Clark withdraws? Choose the correct.a. $100,000b. $126,250c. $130,000d. $133,750
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