Give the journal entry to record admission

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Reference no: EM132741631

December 31, 2009, the capital balances and profit and loss sharing of the partners ABC Co. are presented below. It is agreed that a new partner, Dada, is to be admitted to the firm.

Capital Balances P & L ratios
Abba P10,000 5/8
Babba 8,000 2/8
Cadda 6,000 1/8

Required:

Problem a: For each of the following situations involving the admission of Dada into the partnership, give the journal entry to record his admission

1. Dada purchases ¼ of Cadda's interest in the firm paying Cadda P5,000.

2. Dada buys ¼ interest in the firm for P7,000 by purchasing ¼ of the interest of each of the three partners. Asset revaluation is made prior to the admission of Dada.

3. Dada invest P115,000 and receives a one-fourth interest in the capital and profits of the business, bonus being allowed on the admission

Reference no: EM132741631

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