A partnership begins its first year of operations with the following capital balances: P 110,000 ABC, Capital DEF, Capital GHI, Capital 80,000 110,000 According to the articles of partnership, all profits will be assigned as follows: ➤ ABC will be awarded an annual salary of P20,000 with P10,000 assigned to GHI. > The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. > The remainder will be assigned on a 5:2.3 basis, respectively. > Each partner is allowed to withdraw up to P10,000 per year. der from the Studen fandbook: Code Assume that the net loss for the first year of operations is P30,000 and that net income for the subsequent year is P40,000. Assume also that each partner withdraws the maximum amount from the business each period. What is the balance in ABC's capital account at the end of the first year?admission with i of grade

A partnership begins its first year of operations with the following capital balances: P 110,000 ABC, Capital DEF, Capital GHI, Capital 80,000 110,000 According to the articles of partnership, all profits will be assigned as follows: ➤ ABC will be awarded an annual salary of P20,000 with P10,000 assigned to GHI. > The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. > The remainder will be assigned on a 5:2.3 basis, respectively. > Each partner is allowed to withdraw up to P10,000 per year. der from the Studen fandbook: Code Assume that the net loss for the first year of operations is P30,000 and that net income for the subsequent year is P40,000. Assume also that each partner withdraws the maximum amount from the business each period. What is the balance in ABC's capital account at the end of the first year?admission with i of grade

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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P and T are in partnership sharing profits and losses in the ratio of 60:40. The partnership agreement provides that interest on partner’s capital account should be allowed at the rate of 10% pa. The following information has been made available for the year ended 31st Dec 2018. Net profit for the year RO 30,500 Partner P Partner T RO RO Capital Accounts on 1st Jan 2018 20,000 15,000 Current Account 1,800(Cr) 3,400 (Dr) Drawings for the year 12,785 18,275 Salary to be credited -- 6,000 Interest on drawings 640 910 You are required to: Prepare Journal Entries Prepare…
A partnership begins its first year of operations with the following capital balances: Allegan, Capital Berrien, Capital $ 56,000 46,000 56,000 Kent, Capital According to the articles of partnership, all profits will be assigned as follows: Allegan will be awarded an annual salary of $16,000 with $8,000 assigned to Kent. The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2:3 basis, respectively. • Each partner is allowed to withdraw up to $7,000 per year. The net loss for the first year of operations is $22,000, and net income for the subsequent year is $27,000. Each partner withdraws the maximum amount from the business each period. Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations. Ending Capital Ending Capital Balance Year One Balance Year Two Prepare schedules that compute…
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Aquila partnership began its first year of operations with the following capital balances: N, Capital: P143,000 A, Capital: P104, 000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: -N was to be awarded an annual salary of P26,000 with P13,000 salary assigned to C -Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. -The remainder was to be assigned on a 4:3:3 basis, respectively. -Each partner was allowed to withdraw up to P13,000 per year. Assume that the net loss for the first year of operations was P36,000 with net incomeof P42,000 in the second year. Assume further that each partner withdrew the maximum amount fiom the business each year. A. What was C's share of income or loss for the first year? B. What was the balance in C's capital account at the end of the second year?
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A partnership agreement states that following: the partners shall participate in profits: partner 1 - 70%, partner 2 - 25% and partner 3 - 5%. if the partnership had net income for the year of $135,000, what would be partner's 2 share of the income? a. $33,750. b. $94,500. c. $100,000. d. $6,750.
A and B formed a Partnership on January 1, 2020. A contributed capital of P50,000, while B contributed capital of P30,000. The Partnership agreement provides for the following: o Capital accounts are to be credited annually with interest at 5% of the beginning capital. o Partner B is to be paid salary of P2,000 a month. o Partner B is to receive a bonus of 10% based on the net income. The Partnership's income statement for the year ended is as follows: Revenues P101,000 30,000 71,000 Expenses (including salary, interest, and bonus) Net income Determine the amount of bonus.
X and Y are partners and have beginning capital balances of P 360,000 and P 600,000, respectively. Partnership profits and losses are allocated as follows: salaries of P 160,000 and P 200,000 to X and Y, respectively; 10% interest on their beginning capital balances, any remaining profit is divided equally. Partnership profit of P 600,000 is allocated as follows: a. X – P 300,000; Y – P 300,000 b. X – P 280,000; Y – P 320,000 c. X – P 268,000; Y – P 332,000 d. X – P 192,000; Y – P 408,000