5. How much is the share of B? This is not a part of our exam but is included in the reference book and I want to review its answer. 5. In its first year of operations, A and B's partnership businessearmed profit of P2,500,000. It was agreed that A is to have anannual salary allowance of P100,000 and a 20% bonus basedon profit after deducting the salary and the bonus. However,there has been no stipulation on how the remaining profit is tobe shared between A and B. A contributed P300,000, while Bcontributed P500,000. How much is the share of B?a. 1,250,000b. 1,060,000c 1,350,000d. 1,080,000

Profit after salary allowance = 2500000 - 100000 = 2400000 Profit after salary and bonus allowance =…

Answered: & In its first year of operations, A…

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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In its first year of operations, A and B's partnership business earned profit of P2,500,000. It was agreed that A is to have an annual salary allowance of P100,000 and a 20% bonus based on profit after deducting the salary and the bonus. However, there has been no stipulation on how the remaining profit is to be shared between A and B. A contributed P300,000, while B contributed P500,000. Which of the following statements is correct? a. A will receive a greater share in the partnership profit. b. B will receive a greater share in the partnership profit. c. A and B will receive the same amounts. d. The problem is vague and grossly erroneous.
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The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute for the respective shares of the partners on the partnership profit.
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1. Aristorenas, Soriano and Filamor have the following profit and loss agreement: Partners Aristorenas and Soriano will receive salaries of P40,000 each. Partner Filamor will get a bonus of 10% of profit after salaries and bonus. Remaining profits are shared by Aristorenas, Soriano and Filamor in the ratio of 3:4:3, respectively. * The partnership had a profit of P91,000. How much should be allocated to Filamor? P 4,000 b. Р 4,070 а. C. P 9,100 d. P27,300 2. A partnership showed the following account balances: sales, P70,000; cost of sales, P40,000; operating expenses, P10,000; partners' salaries, P13,000; interest paid to banks, P2,000 and partners' drawings, P8,000. The partnership profit is P20,000. с. Р 5,000. d. P(3,000). а. b. P18,000. 3. Villena, a partner in the Dulay, Villena & Co., has a 30% participation in partnership profits and losses. Villena's capital account has a net decrease of P120,000 during the calendar year 2019. During 2019, Villena withdrew P260,000 (charged…
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3. Refozar, Martinez and Magsino formed a partnership. It's on a calendar year basis. The profit-sharing arrangements are as follows: Until June 30, 2016, the annual salaries are provided as follows: Martinez, P40,000 and Magsino, P20,000. The residual profit will be shared in the ratio of 6:2:2. From July 1, 2016, the salarles will be discontinued and the profit to be divided in the revised ratio of 5:3:2. Profit for the year ended Dec. 31, 2016 was P400,000 before charging partners' salaries, accruing evenly through the year, and after charging an expense of P40,000, which it was agreed related wholly to the first six mohths of the year. How should the profit for the year be divided among the partners? Martinez P130,000 P116,000 Magsino P88,000 P84,000 Refozar P182,000 P200,000 а. b. Portnership Operations and Financial Reporting | 83
The partnership agreement of ABC partnership includes the following profit and loss sharing provisions: Salaries to partners B and C amounting to P5,000 per month 5% bonus to partner B based on profits after salaries and bonus Remainder to be allocated 2:2:1 At the end of current period, the partnership generated a net income of P100,000. Based on the information provided, how should the profit be distributed?
The net income of the Mohammad and Ahmed partnership is 250,000. The partnership agreement specifies that profits and losses will be shared equally after salary allowances of 200,000 (Mohammad) and 300,000 (Ahmed) have been allocated. At the beginning of the year, Mohammad's Capital account had a balance of 500,000 and Ahmed's Capital account had a balance of 650,000. What is the balance of Mohammad's Capital account at the ?end of the year after profits and losses have been distributed 825,000.a O 375,000.b O 625,000 .cO 575,000.d O
During the year, the ABC partnership’s operations generated a loss. The partnership agreement provides for the following P/L sharing provisions: · Interest of P2,000, P3,000, and P5,000 to partners A, B, and C, respectively · Salary of P15,000 to partner A · Any remainder is allocated equally. If the share of partner A in the loss is P8,000, how much is the net loss for the period?
4. In 2021, X, Y, & Z are partners with average capital balances of P120,000, P60,000, and P40,000, respectively. The partners receive 10% interest on their average capital balance. After deducting salaries of P30,000 to X and P20,000 to Y, the residual profit or loss is devided equally. During the year the partnership sustained a loss of P33,000, before interest and salaries to the partners. By what amount should X's capital account change? *
2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. DA bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the…

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