Bloom and Carnes share profits and losses in a ratio of 2:3, respectively. Bloom and Carnes receive salary allowances of P10,000 and P20,000, also respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners’ drawings are not used in determining the average capital balances. Total net income for 20x6 is P60,000. If net income after deducting the interest and salary allocations is greater than P20,000, Carnes receives a bonus of 5% of the original amount of net income. Bloom January 1 capital balances P200,000 Yearly drawings (P1,500 a month) 18,000 Carnes January 1 capital balances P300,000 Yearly drawings (P1,500 a month) 18,000 How much is the share of Bloom in the profit of the business? 20,000. 22,000 18,000 24,000 How much is the capital balance of Cannes at the end of the year? a. 320,000 b. 300,000 c. 338,000 d. 342,000
Bloom and Carnes share profits and losses in a ratio of 2:3, respectively. Bloom and Carnes receive salary allowances of P10,000 and P20,000, also respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners’ drawings are not used in determining the average capital balances. Total net income for 20x6 is P60,000. If net income after deducting the interest and salary allocations is greater than P20,000, Carnes receives a bonus of 5% of the original amount of net income. Bloom January 1 capital balances P200,000 Yearly drawings (P1,500 a month) 18,000 Carnes January 1 capital balances P300,000 Yearly drawings (P1,500 a month) 18,000 How much is the share of Bloom in the profit of the business? 20,000. 22,000 18,000 24,000 How much is the capital balance of Cannes at the end of the year? a. 320,000 b. 300,000 c. 338,000 d. 342,000
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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Bloom and Carnes share profits and losses in a ratio of 2:3, respectively. Bloom and Carnes receive salary allowances of P10,000 and P20,000, also respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners’ drawings are not used in determining the average capital balances. Total net income for 20x6 is P60,000. If net income after deducting the interest and salary allocations is greater than P20,000, Carnes receives a bonus of 5% of the original amount of net income.
Bloom
January 1 capital balances P200,000
Yearly drawings (P1,500 a month) 18,000
Carnes
January 1 capital balances P300,000
Yearly drawings (P1,500 a month) 18,000
How much is the share of Bloom in the profit of the business?
20,000.
22,000
18,000
24,000
How much is the capital balance of Cannes at the end of the year?
a. 320,000
b. 300,000
c. 338,000
d. 342,000
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