A and B formed a Partnership on January 1, 2020. A contributed capital of P50,000, while B contributed capital of P30,000. The Partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of the beginning capital. Partner B is to be paid salary of P2,000 a month. Partner B is to receive a bonus of 10% based on the net income. The Partnership's income statement for the year ended is as follows: Revenues P101,000 Expenses (including salary, interest, and bonus) 30,000 Net income 71,000 Determine the amount of bonus.
A and B formed a Partnership on January 1, 2020. A contributed capital of P50,000, while B contributed capital of P30,000. The Partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of the beginning capital. Partner B is to be paid salary of P2,000 a month. Partner B is to receive a bonus of 10% based on the net income. The Partnership's income statement for the year ended is as follows: Revenues P101,000 Expenses (including salary, interest, and bonus) 30,000 Net income 71,000 Determine the amount of bonus.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6. A and B formed a Partnership on January 1, 2020. A contributed capital of P50,000, while B contributed capital of P30,000. The Partnership agreement provides for the following:
- Capital accounts are to be credited annually with interest at 5% of the beginning capital.
- Partner B is to be paid salary of P2,000 a month.
- Partner B is to receive a bonus of 10% based on the net income.
The Partnership's income statement for the year ended is as follows:
|
Revenues |
P101,000 |
|
Expenses (including salary, interest, and bonus) |
30,000 |
|
Net income |
71,000 |
Determine the amount of bonus.
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