required:A's share in partnership's profit B's share in partnership's profitEnding Capital Balance of AEnding Capital Balance of B 6. A and B's partnership began operations on April 1, 20x1. Onthis date, A invested P200,000 cash, while B invested a non-cash asset with a carrying amount of P600.000 and à fair valueof P400,000. The partnership agreement stipulates thefollowing:Monthly salary of P8,000 to A, recognized as expense. Themonthly salaries are to be paid at each month-end.Bonus to A equal to 10% of profit before salaries and interestbut after bonus.10% annual interest on the weighted average balance of B'scapital.Balance is shared equallyB contributed additional P44,000 on July 1, 20x1 and madedrawings of P24,000 on Dec. 1, 20x1. The partnership reportedprofit of P588,000 before deductions for bonus and interest

A partnership firm is an entity created to carry on the business by two or more people jointly. The…

Answered: 8. A and B's partnership began…

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's share in partnership's profit

B's share in partnership's profit

Ending Capital Balance of A

Ending Capital Balance of B

6. A and B's partnership began operations on April 1, 20x1. On
this date, A invested P200,000 cash, while B invested a non-
cash asset with a carrying amount of P600.000 and à fair value
of P400,000. The partnership agreement stipulates the
following:
Monthly salary of P8,000 to A, recognized as expense. The
monthly salaries are to be paid at each month-end.
Bonus to A equal to 10% of profit before salaries and interest
but after bonus.
10% annual interest on the weighted average balance of B's
capital.
Balance is shared equally
B contributed additional P44,000 on July 1, 20x1 and made
drawings of P24,000 on Dec. 1, 20x1. The partnership reported
profit of P588,000 before deductions for bonus and interest

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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