8 Ricky and Nelson had the following clauses in their partnership contract: Salaries: for Ricky, P 45,000 for Nelson, P 36,000 The above salaries are to be charged against the earnings of the business. In addition, Ricky is to be allowed a bonus of 20% of the net income after salaries, interest and bonus have been deducted. The interest on Ricky's capital is computed at P 18,640 and on Nelson's capital is P 32,780. The residual income is to be divided equally .The net profit before salaries, interest and bonus is P 198,750. EQUIRED: Show how the net profit will be divided.

8 Ricky and Nelson had the following clauses in their partnership contract: Salaries: for Ricky, P 45,000 for Nelson, P 36,000 The above salaries are to be charged against the earnings of the business. In addition, Ricky is to be allowed a bonus of 20% of the net income after salaries, interest and bonus have been deducted. The interest on Ricky's capital is computed at P 18,640 and on Nelson's capital is P 32,780. The residual income is to be divided equally .The net profit before salaries, interest and bonus is P 198,750. EQUIRED: Show how the net profit will be divided.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...

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