A, B, and C are partners in an accounting firm. Their capitalaccount balances at the year-end were A P120,000; BP140,000; C P80,000. They share profits and losses on a3:3:4 ratio, after the following special terms:o Interest of 10% shall be paid on that portion of apartner's capital in excess of P100,000.• Quarterly salaries of P5,000, P5,000 and P6,000 shallbe paid to partners A, B, and C, respectively.• Partner C is to receive a bonus of 10% of net incomeafter salaries, interest and bonus.Assuming a net income of P60,000 for the year, the totalprofit share of partner C was:

Calculation of Interest on Capital: Particulars Partner A Partner B Partner C Total Interest on…

Answered: A, B, and C are partners in an…

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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Carmella and Luciana practice in partnership as accountants. Interest on fixed capital balances is allowed at 8% per annum and the remaining profits are shared equally. The following Trial balance was extracted from the ledger at the year ended 31st December 2020: Sh. Sh. Bank 294,000 Fixed capital: Carmella 1,500,000 Luciana 800,000 Current Accounts: Carmella 68,000 Luciana 74,000 Fees invoiced to clients…
[The following information applies to the questions displayed below.] Ries, Bax, and Thomas invested $80,000, $112,000, and $128,000, respectively, in a partnership. During its first calendar year, the firm earned $249,000. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $249,000 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments. Complete this question by entering your answers Appropriation General of profits Journal Allocate $249,000 net income in the ratio of their begin (Do not round intermediate calculations.) Supporting Percentage of Total Computations Equity Ries Bax Thomas x X X Income Summary $ 249,000 $ 249,000 $ 249,000 Allocated Income to Capital
Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:Juan, capital ending balance – P 3,000,000Debits: June 1 - P 500,000Credits: March 30 – P 1,000,000Credits: October 30 – P 500,000 Pedro, capital ending capital balance – P 4,500,000Credits: May 1 – P 1,000,000Credits: August 31 – P 1,000,000Income for the year amounted to P 300,000. How much profit will be distributed to Juan?
200A. Apple contributed P 36,000 and Green contributed P 30,000. 3.11 Apple and Green started a business as a partnership on Janua 200A. Apple contributed P 36.000 and Green contributed P 30,000. It was agreed that earnings after interest and salary allowances would be divided in the ratio of 2/3 and 1/3 to Apple and to Green, respectively. Interest of 4% per annum on the beginning capital balances will be allowed. Earnings, salaries, and withdrawals for 200A and 200B were: Withdrawals Earnings before Interest and Salaries P 11,590 24,600 Salaries paid Green Green Apple P 4,000 P 6,000 Apple P 6,140 P 4,850 7,152 200A 200B 4,000 6,000 4,048 EQUIRED: Statement of Partners’ Equity for both years.
PJ, Ian, and Lemuel are partners in an accounting firm. Their capital account balances at year-end were PJ, P180,000; Ian, P220,000; and Lemuel, P100,000. They share profits and losses on a 4:4:2 ratio, after the following special terms: 1) Partner Ian is to receive a bonus of 10% of net income after the bonus. 2) Interests of 10% shall be paid on that portion of a partner's capital in excess of P200,000. 3) Salaries of P20,000 and P24,000 shall be paid to partners PJ and Lemuel, respectively. Assuming a net income of P88,000 for the year, the total profit share of partner Lemuel was:
The partnership contract of Robert Florence and Karen Partnership provided for the sharing of net income and losses as follows:A) Salaries of $30,000 to Robert, $28,000 to Florence and $26,000 to Karen.B) Interest of 10% a year on average capital balances.C) Any residual income or loss in the ration of 3:5:2 to Robert, Florence, and Karen respectively. The net income for the year is $140,000. The average capital balances were $60,000 for Robert, $40,000 for Florence and $100,000 for Karen. Prepare a journal entry to distribute the profit. Show details of the calculation in the space provided.
Scenario B: Partners A, B, and C operate a business with profit sharing agreement ratios of 5: 3:2, and capital balances of $300,000, $200,000, and $100,000 respectively. The total income for the year is $180,000. Each partner receives a fixed salary of $50, 000, and they are entitled to earn 10% interest on their capital balances. Calculate the total income allocated to Partner
Ali had a P50,000 capital balance for eight months and a P65,000 balance for four months. Barry had a P38,000 capital balance for five months and a P50,000 balance for seven months. If the net income of the year is P80,000, the entry to show the distribution of income to each partner is: a. Ali, Capital Barry, Capital b. Income Summary Ali, Capital Barry, Capital C. оооо Income Summary Ali, Capital Barry, Capital d. Income Summary Ali, Capital Barry, Capital O A Income Summary B O C D 44,000 36,000 80,000 44,000 80,000 36,000 80,000 45,320 80,000 36,000 44,000 34,680
3. Raja and Sam were partners in a firm sharing profits in the ratio of their capitals contributed on commencement of business which were RO. 80,000 and RO. 60,000 respectively. The firm stared business on April 1, 2001. According to the partnership agreement interest on capital and drawings are 12% and 10% p.a. respectively. Raja and Sam are to get a monthly salary of RO. 2,000 and RO. 3,000 respectively. The profits for year ended March 31, 2002 before making above appropriation was RO. 100,300. The drawings of Raja and Sam were RO. 40,000 and RO. 50,000, respectively. Interest on drawings amounted to RO. 2,000 for Raja and RO 2,500 for Sam. Prepare Profit and Loss Appropriation Account and partners' capital accounts assuming that their capitals are fluctuating.
The following information applies to the questions displayed below.]Ries, Bax, and Thomas invested $56,000, $72,000, and $80,000, respectively, in a partnership. During its first calendar year, the firm earned $431,100.Required:Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $431,100 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
A B and C are partners with capital balances of $90,000, $70,000, and $50,000, respectively. The partners agreed to share profits and losses as follows: Salary allowances of $7,000 to A, $8,000 to B and $14,000 to C. Interest allowances of 1096 on beginning of year capital balances Balance to be divided in the ratio of 2:11. If profit for the year 15 $250,000, calculate each partner's share and prepare the appropriate journal entry close the income Summary to the capital accounts Next Page Support | PowerSchool Communit Time left for this
Rex and Kelsey are partners who share income in the ratio of 3:2. Their capital balances are $95,000 and $140,000 respectively, on January 1. The partnership generated net income of $40,000 for the year. What is Rex's capital balance after closing the revenue and expense accounts to the capital accounts? a. $71,000 b. $119,000 c. $146,000 d. $111,000 e. None of the above.

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