AA and BB formed a partnership in January 1, 2016 and made the following investments and withdrawals during the year. AA BB Investments Withdrawal Investments Withdrawal January 1 June 1 84,000 P. 72,000 54,000 18,000 36,000 August 1 December 1 9,000 27,000 The partnership's profit and loss agreement provides for monthly salary of P15,000 for each partner. AA is to receive a bonus of 25% on net income after salaries and bonus. The partners are also to receive interest of 5% per annum on average capital balances. Any remainder is to be allocated based on their ending capital balances. Assuming the income summary has a credit balance of P480,000. Determine which of the following statements is incorrect in the partnership operation: AA is to receive a bonus of P48,000 b. a. BB has a share of 40% in the P75,500 remainder or balance AA, Capital account will increase by P283,000 d. C. BB will receive P2,625 interest on average capital balance

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.