15 Atoy and Bitoy are partners. Their agreement provides that Atoy shall receive a bonus of 20% of the net profit. The net profit before bonus during the period is P 20,400. REQUIRED: Compute the bonus of Atoy if the bonus is: 4. Treated as distribution of profit (based on the net profit before bonus). b. Treated as an expense (based on the net profit after bonus).
15 Atoy and Bitoy are partners. Their agreement provides that Atoy shall receive a bonus of 20% of the net profit. The net profit before bonus during the period is P 20,400. REQUIRED: Compute the bonus of Atoy if the bonus is: 4. Treated as distribution of profit (based on the net profit before bonus). b. Treated as an expense (based on the net profit after bonus).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:15 Atoy and Bitoy are partners. Their agreement provides that Atoy
shall receive a bonus of 20% of the net profit. The net profit before
bonus during the period is P 20,400.
REQUIRED: Compute the bonus of Atoy if the bonus is:
Treated as distribution of profit (based on the net profit before
bonus).
b. Treated as an expense (based on the net profit after bonus).
3.6 The partnership of Mac and Donald, being a commercial partnership.
is subject to income tax of 37.5%. Their profit and loss sharing
agreement provides that Mac, the managing partner, is entitled to a
bonus of 40% of the net profit. During the year, the partnership
earned net profit before bonus and tax of P 140,000.
REQUIRED: Compute the bonus of Mac assuming that:
a. The bonus is based on the net profit before bonus but after tax.
b. The bonus is based on the net profit after bonus and tax.
3.7 M, N, and O formed a partnership on January 1, 200A with
investments of P 40,000, P 24,000 and P 20,000, respectively. The
partners agreed to the following distribution of profits:
Annual salaries allowed:
M, P 4,800; N, P 6,000; O, P 6,000
5% interest on the beginning capital.
M, the managing partner is allowed a bonus of 20% of the net
profit after treating as expenses the partners' salaries, interest,
and bonus.
Profits after the allowances are to be divided 3:3:4, for M, N,
and O, respectively.
For the year 200A, the net profit before interest, salaries, and
bonus amounted to P 29,400. Cash withdrawals made were M,
P 10,200; N, P 12,000; and O, P 10,600.
REQUIRED: Prepare a Statement of Partners' Equity for the year ended
December 31, 200A.
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