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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #16
Distribution of Profits or Losses Based on Partners' Agreement
Labasan, Gabayan, and Villanueva are manufacturers representatives In the
architecture business. Their capital accounts were as follows:
Labasan, Capital
9/1 80,000
Gabayan, Capital
3/1 90,000
Villanueva, Capital
8/1 120,000
1/1 300,000
5/1 60,000
1/1 400,000
7/1 50,000
9/1 40,000
1/1 500,000
4/1 70,000
6/1 30,000
Required:
For each of the following independent profit and loss agreement, prepare the profit
distribution schedule:
1. Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to
Villanueva. Labasan receives a bonus of 5% of profit after bonus. Interest is 10% of
ending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a
3:3:4 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 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.
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