3.13 The partnership of Con and Rad started on June 1, 200C with an initial investment of P 200,000 and P 250,000, respectively. After one year of operations, the partnership reported a loss of P 8,000 after treating interest and salary allowances as expenses. In the partnership contract, the following provisions were indicated: * 10% interest on the original investment * Salaries of P 20,000 and P 48,000 for Con and Rad, respectively. * Con is allowed a bonus of 10% of the net income before interest, salary and bonus allowances. * Residual income: equally REQUIRED: Show how the profit or loss was distributed.

3.13 The partnership of Con and Rad started on June 1, 200C with an initial investment of P 200,000 and P 250,000, respectively. After one year of operations, the partnership reported a loss of P 8,000 after treating interest and salary allowances as expenses. In the partnership contract, the following provisions were indicated: * 10% interest on the original investment * Salaries of P 20,000 and P 48,000 for Con and Rad, respectively. * Con is allowed a bonus of 10% of the net income before interest, salary and bonus allowances. * Residual income: equally REQUIRED: Show how the profit or loss was distributed.

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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M, N, and 0 formed a partnership on January 1, 200A with 3.7 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: М, Р 4,800; N, P 6,000; 0, Р 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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