A, B, and C put up a partnership on January 1, 2020 by investing P500,000 each and agreed to maintain individual average capital of P520,000 during the first two years of operations. The partners agreed to divide profits and losses as follows: • Interest at 8% on the excess or deficiency on the average capital investment. Bonus to B at 25% of profits after interests but before bonus. Remainder to be shared equally by A, B, and C. On April 1, 2020, A made an additional investment in the form of a machinery. The partners determined that the market value of the said machinery is P350,000 but agreed to value it at P300,000. On June 30, 2020, C made a withdrawal of P75,000 in anticipation of partnership profit share. On August 1, 2020, B invested an additional P90,000 cash. Lastly, on November 30, 2020, C made a permanent withdrawal of P30,000. The partnership reported a profit of P250,000 for the first year ended 2020.
A, B, and C put up a partnership on January 1, 2020 by investing P500,000 each and agreed to maintain individual average capital of P520,000 during the first two years of operations. The partners agreed to divide profits and losses as follows: • Interest at 8% on the excess or deficiency on the average capital investment. Bonus to B at 25% of profits after interests but before bonus. Remainder to be shared equally by A, B, and C. On April 1, 2020, A made an additional investment in the form of a machinery. The partners determined that the market value of the said machinery is P350,000 but agreed to value it at P300,000. On June 30, 2020, C made a withdrawal of P75,000 in anticipation of partnership profit share. On August 1, 2020, B invested an additional P90,000 cash. Lastly, on November 30, 2020, C made a permanent withdrawal of P30,000. The partnership reported a profit of P250,000 for the first year ended 2020.
A, B, and C put up a partnership on January 1, 2020 by investing P500,000 each and agreed to maintain individual average capital of P520,000 during the first two years of operations. The partners agreed to divide profits and losses as follows: • Interest at 8% on the excess or deficiency on the average capital investment. Bonus to B at 25% of profits after interests but before bonus. Remainder to be shared equally by A, B, and C. On April 1, 2020, A made an additional investment in the form of a machinery. The partners determined that the market value of the said machinery is P350,000 but agreed to value it at P300,000. On June 30, 2020, C made a withdrawal of P75,000 in anticipation of partnership profit share. On August 1, 2020, B invested an additional P90,000 cash. Lastly, on November 30, 2020, C made a permanent withdrawal of P30,000. The partnership reported a profit of P250,000 for the first year ended 2020.
What is the average capital balance of A during 2020?
How much is the bonus given to B during 2020?
How much is the share of A in the partnership profit for the year ended 2020?
What is the capital balance of C on December 31, 2020?
Transcribed Image Text:A, B, and C put up a partnership on January 1, 2020 by investing P500,000 each and agreed to
maintain individual average capital of P520,000 during the first two years of operations. The
partners agreed to divide profits and losses as follows:
Interest at 8% on the excess or deficiency on the average capital investment.
• Bonus to B at 25% of profits after interests but before bonus.
Remainder to be shared equally by A, B, and C.
On April 1, 2020, A made an additional investment in the form of a machinery. The partners
determined that the market value of the said machinery is P350,000 but agreed to value it at
P300,000. On June 30, 2020, C made a withdrawal of P75,000 in anticipation of partnership profit
share. On August 1, 2020, B invested an additional P90,000 cash. Lastly, on November 30, 2020,
C made a permanent withdrawal of P30,000.
The partnership reported a profit of P250,000 for the first year ended 2020.
Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.
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