A, B, and C's partnership agreement requires the partners to maintain average investments P2,500,000, P1,250,000, and P1,250,000, respectively. Six percent (6%) interest per annum is to be computed on any excess or deficiency in the contributions. After the interest allowances, any remaining profit or loss is shared in the ratio of 5:3:2. Average amounts invested during the first six months were as follows: A, P3,000,000; B, P1,375,000; and C, P1,000,000. Loss of P62,500 was incurred for the first six months. How is the loss distributed among the partners? A В а. 12,500 b. 18,375 с. 21,875 d. 31,250 10,000 21,875 18,375 18,750 49,500 22,250 22,250 12,500
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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