2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the partnership loss.

2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the partnership loss.

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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A and B agreed that they will receive annual salaries of P60,000 each. Bonus shall be given to A of 20% of the net income after partners' salaries, the bonus being treated as an expense. Balance will be divided equally. The partnership reported a net income of P360,000 after partners' salaries but before bonus. How much is the share of B in the profit?
A, B, and C agreed that A will receive 10% of profit and each partner receive 6% interest on average capital investment. Residual profit or loss is divided equally. The average capital balances of A, B, and C were P80,000, P50,000, and P30,000. What amount should C receive from the partnership income of P100,000?
Additional information1. The net profit according to the Profit and Loss account amounted to R500 000 on 28February 2021.2. The partnership agreement made provision for the following:1. Interest on capital must be provided at 15% per annum on the balances in the capitalAccounts from 1 March 2020 to 31 August 2020. With effect from 1 September 2019 the interest rate on capital increases to 18% per annum.2. The partners are entitled to the following monthly salaries: Bobby R11 000Vincent R10 0003. Bobby is entitled to a bonus of 15% of the net profit before any appropriations are made.4. Bobby and Vincent share the remaining profits or losses in the ratio 3:2 respectively.
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The partner’s Paru-paru Gee and Kokak Yoo, share profits on the ratio 3:2. Partner’s Paru-paru Gee will receive a yearly bonus of 20% of the profits after deducting salaries and bonus, in addition to his profit share;While partner’s Kokak Yoo will receive an annual salary of P30,000, in addition to his profit share. The annual profit is P90,000. 1. How much was the share of Paru-paru Gee on the partnership profit?A. 30,000 C. 40,000 B. 40,800 D. 45,000 2. How much was the share of Kokak-Yoo on the partnership profit?A. 60,000 C. 49,200 B. 50,000 D. 45,000 kindly show your solution. Thank you
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