. Problem #16Distribution of Profits or Losses Based on Partners' AgreementLabasan, Gabayan, and Villanueva are manufacturers representatives In thearchitecture business. Their capital accounts were as follows:Labasan, Capital9/1 80,000Gabayan, Capital3/1 90,000Villanueva, Capital8/1 120,0001/1 300,0005/1 60,0001/1 400,0007/1 50,0009/1 40,0001/1 500,0004/1 70,0006/1 30,000Required:For each of the following independent profit and loss agreement, prepare the profitdistribution schedule:1. Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 toVillanueva. Labasan receives a bonus of 5% of profit after bonus. Interest is 10% ofending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a3:3:4 ratio. Profit was P789,600.2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan,P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of10% of profit after bonus and salary. Any remainder is divided equally. Profit wasP680,800.3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries areP210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide anyremainder in an 8:7:5 ratio. Profit was P929,400.

Partnership: A form of business entity formed by mutual agreement between two or more persons. In…

2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800. 3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400.

2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800. 3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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