A and B’s partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared on 60:40 ratio, respectively. During the period, the partnership earned a profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P40,000 on April 1, P80,000 on Sept. 30, and P20,000 on Dec. 31, made drawings of P60,000 on July 31. Compute the respective shares of the partners in the profit.
A and B’s partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared on 60:40 ratio, respectively. During the period, the partnership earned a profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P40,000 on April 1, P80,000 on Sept. 30, and P20,000 on Dec. 31, made drawings of P60,000 on July 31. Compute the respective shares of the partners in the profit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A and B’s partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared on 60:40 ratio, respectively. During the period, the partnership earned a profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P40,000 on April 1, P80,000 on Sept. 30, and P20,000 on Dec. 31, made drawings of P60,000 on July 31. Compute the respective shares of the partners in the profit.
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