AA, BB, and CC are partners with average capital balances during 2021 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC, the residual profit or loss is divided equally. In 2021, the partnership sustained a P99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?

AA, BB, and CC are partners with average capital balances during 2021 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC, the residual profit or loss is divided equally. In 2021, the partnership sustained a P99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 12DQ

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