Babes and Honey, on January 1, 2022, have respective capital balances of P300,000 and P500,000. Babes invested an additional P300,000 on June 30, while Honey invested an additional P600,000 on November 1. Babes had a capital withdrawal of P200,000 on September 30. The partners allow respective monthly salaries of P5,000 and P6,000, credit of 15% interest on average capital balances, and share any residual earnings equally. If the net income is P250,000 for 2022, Honey’s distributive share would be:
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Babes and Honey, on January 1, 2022, have respective capital balances of P300,000 and P500,000. Babes invested an additional P300,000 on June 30, while Honey invested an additional P600,000 on November 1. Babes had a capital withdrawal of P200,000 on September 30. The partners allow respective monthly salaries of P5,000 and P6,000, credit of 15% interest on average capital balances, and share any residual earnings equally.
If the net income is P250,000 for 2022, Honey’s distributive share would be:
Step by step
Solved in 2 steps
