A, B and C are partners in an accounting firm. Their capital account balances at year-end were: A, P90,000; B, P110,000; C, P50,000. They share profits and losses in a 4:4:2 ratio, after the following special terms: Partner C is to receive a bonus of 10% of the net income after the bonus.
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.
A, B and C are partners in an accounting firm. Their capital account balances at year-end were: A, P90,000; B, P110,000; C, P50,000. They share
Partner C is to receive a bonus of 10% of the net income after the bonus.
Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.
Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively.
Assuming a net income of P44,000 for the year, the total profit share of partner C would be:
a. P7,800
b. P16,800
c. P19,400
d. P19,800
A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have been paid and the partners are all insolvent. The partners capital accounts are as follows Harry P40,000, Landers P30,000 and Waters 15,000. The partners share profits and losses 4:4:2.
If the building is sold for P50,000, how much cash will Waters receive in the final settlement?
P5,000.
P9,000.
P18,000.
P28,000.
P55,000.
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