V, K and G are partners in VKG Partnership. Their profit ratio is 5:3:2 while their original capital interest ratio is 4:4:2. On July 1, 2015, P was admitted by the partnership for 20% interest in capital and 25% in profits by contributing 700,000 cash, and the old partners agree to bring their interest to their original capital and profit interest sharing ratio. P is the recipient of the transfer of capital of 2,240,000 from the existing partners.The partnership had net income of 1,680,000 before the admission of P and the partners agree to revalue its overvalued equipment by 280,000. Capital balance of K increased by 84,000 as a result of the admission of P while the capital balance of G at the start of the year is 5,600,000.

Answer rating: 100% (QA)

VK and G are patbers in VKG Patnership Their profit ratio is 532 while their original capital intere... View the full answer