and B formed a partnership on March 1 , 20x1. A invested P250,000 and B 150,000. It was agreed that A, will be appointed as the managing partner and he will receive a salary of P60,000 per year and also 10% bonus on the net profit after the adjustment for the salary; the balance of the profit was to be shared in a 62.5:37.5 ratio to A and B, respectively. On December 31, 20x1, the following accounts are available: Cash
A and B formed a partnership on March 1 , 20x1. A invested P250,000 and B 150,000. It was agreed that A, will be appointed as the managing partner and he will receive a salary of P60,000 per year and also 10% bonus on the net profit after the adjustment for the salary; the balance of the profit was to be shared in a 62.5:37.5 ratio to A and B, respectively. On December 31, 20x1, the following accounts are available:
|
Cash |
140,000 |
Accounts Payable |
120,000 |
|
|
134,000 |
Sales |
466,000 |
|
Furniture and Fixtures |
90,000 |
A, capital |
250,000 |
|
Purchases |
392,000 |
B, capital |
150,000 |
|
Sales Return and Allowances |
10,000 |
A, drawings |
(40,000) |
|
Operating expenses |
120,000 |
B, drawings |
(60,000) |
On December 31, 20x1 the inventories on hand were P146,000; unused supplies P5,000; prepaid insurance were P1,900 (the entity uses the expense method). The accrued liabilities totaled P3,100 and the
The share of A in the net income is: 69,080 is the answer, I need a solution.
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