10. Bagcal and Cabatuan was organized and began operations on March 1 2020. On that date, Bagcal invested P337,500, and Cabatuan invested computer equipments with current fair values of 405,000. Cabatuan also invested P135,000 cash in the partnership on November 1, 2020, because of its shortage of cash. The partnership contract includes the following remuneration plan: Bagcal Cabatuan Annual salary (recognized as operating expense) P40,500 Annual interest on average capital P54,000 10% 10% Remainder 60% 40% The annual salary was to be withdrawn by each partner in 12 monthly installments. During the year ended February 28, 2021, the partnership had net sales of P1,125,000, cost of goods sold of P630,000, and total operating expenses of P225,000 (including partners' salaries expense but excluding interest on partners' average capital account balances). Each partner made monthly cash drawings in accordance with the partnership contract. What are the capital balances of the partners on February 28, 2021? Cabatuan Bagcal a. P486,000 P661,500 b. P445,500 P607,500 c. P526,500 P715,500 d. P405,000 P553,500
10. Bagcal and Cabatuan was organized and began operations on March 1 2020. On that date, Bagcal invested P337,500, and Cabatuan invested computer equipments with current fair values of 405,000. Cabatuan also invested P135,000 cash in the partnership on November 1, 2020, because of its shortage of cash. The partnership contract includes the following remuneration plan: Bagcal Cabatuan Annual salary (recognized as operating expense) P40,500 Annual interest on average capital P54,000 10% 10% Remainder 60% 40% The annual salary was to be withdrawn by each partner in 12 monthly installments. During the year ended February 28, 2021, the partnership had net sales of P1,125,000, cost of goods sold of P630,000, and total operating expenses of P225,000 (including partners' salaries expense but excluding interest on partners' average capital account balances). Each partner made monthly cash drawings in accordance with the partnership contract. What are the capital balances of the partners on February 28, 2021? Cabatuan Bagcal a. P486,000 P661,500 b. P445,500 P607,500 c. P526,500 P715,500 d. P405,000 P553,500
Chapter1: Financial Statements And Business Decisions
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