Answer to Question #249855 in Economics for eyow

Question

# 1 Admission by Purchase of Interest

The capital accounts of the Maniquiz and Monte Partnership on Sept 30, 2018 were:

Maniquiz Capital (75% Profit Percentage) P 140,000

Monte, Capital (25% profit percentage) 56,000

Total P 196,000

On Oct 1. Galang was admitted to a 35% interest in the partnership when he purchased 35% of each existing partner’s capital for P 100,000, paid directly to Maniquez and Monte.

Required:

Determine the capital balances of Maniquiz, Monte and Galang after Galang’s admission to the partnership.

Answer 1

$140000*0.35=49000$

$56000*0.35=19600$

$140000-49000=91000$ Maniquiz capital $\frac{91000}{196000}=0.46=46\%$ profit

$56000-19600=36400$ Monte capital 19% profit

68600 Galang capital 35% profit