ABC partnership began its first year of operations with the following capital balances: A, Capital: P143,000 B, Capital: P104,000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: • A 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 basis 5:2:3, 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 P26,000 with net income of P52,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year. Question: What was A, B, and C's share of income or loss for the year?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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ABC partnership began its first year of operations with the following capital balances:
A, Capital: P143,000
B, Capital: P104,000
C, Capital: P143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
A 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 basis 5:2:3, 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 P26,000 with net income of P52,000 in the second year. Assume further
that each partner withdrew the maximum amount from the business each year.
Question:
What was A, B, and C's share of income or loss for the year?
Transcribed Image Text:ABC partnership began its first year of operations with the following capital balances: A, Capital: P143,000 B, Capital: P104,000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: A 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 basis 5:2:3, 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 P26,000 with net income of P52,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year. Question: What was A, B, and C's share of income or loss for the year?
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