A and B formed a partnership. The partnership agreement stipulates the following: Annual salary allowances of P25,000 for A and P4,000 for B. Bonus to A of 10% of the profit after partner's salaries and bonus. The partners share profits and losses on a 60:40 ratio. During the period, the partnership incurred loss of P10,000 before deduction for salaries. By what amount did A's capital account change? a. Decreased by P1,600 b. Increased by P1,600 c. Decreased by P11,600 d. No change

A and B formed a partnership. The partnership agreement stipulates the following: Annual salary allowances of P25,000 for A and P4,000 for B. Bonus to A of 10% of the profit after partner's salaries and bonus. The partners share profits and losses on a 60:40 ratio. During the period, the partnership incurred loss of P10,000 before deduction for salaries. By what amount did A's capital account change? a. Decreased by P1,600 b. Increased by P1,600 c. Decreased by P11,600 d. No change

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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