A and B share profits and losses equally. A and B receive salary allowances of P20,000 and P30,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month balance regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners' drawings are not used in determining the average capital balances. Total net income for 2016 is P120,000. A B January 1 capital balances Yearly drawings (P1,500 a month) Permanent withdrawals of capital: P100,000 18,000 P120,000 18,000 June 3 (12,000) (15,000) May 2 Additional investments of capital: July 3 October 2 40,000 50,000 Question: What is the weighed-average capital for A and B in 2016?

A and B share profits and losses equally. A and B receive salary allowances of P20,000 and P30,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month balance regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners' drawings are not used in determining the average capital balances. Total net income for 2016 is P120,000. A B January 1 capital balances Yearly drawings (P1,500 a month) Permanent withdrawals of capital: P100,000 18,000 P120,000 18,000 June 3 (12,000) (15,000) May 2 Additional investments of capital: July 3 October 2 40,000 50,000 Question: What is the weighed-average capital for A and B in 2016?

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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