A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C was:
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share
- Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000.
- Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively.
- Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus.
Assuming a net income of P60,000 for the year, the total profit share of partner C was:
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