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Castillo, Labasan and Hollanes are partners with average capital balances during 2021 of P472,500, P238,650 and P162,350 respectively. The partners receive 10% interest in their average capital balances after deducting salaries of P122,325 to Castillo and P82,625 to Hollanes, the residual profit or loss are divided equally. In 2021, the partnership had loss of P125,624 before interest and salaries to partners. By what amount should Castillo’s and Hollanes capital account change - increase(decrease)? A. Castillo - 30,267; Hollanes (40,448) B. Castillo - 29,476; Hollanes 17,536 C. Castillo - (40,844); Hollanes 31,235 D. Castillo - 28,358; Hollanes 32,458

Castillo, Labasan and Hollanes are partners with average capital balances during 2021 of P472,500, P238,650 and P162,350 respectively. The partners receive 10% interest in their average capital balances after deducting salaries of P122,325 to Castillo and P82,625 to Hollanes, the residual profit or loss are divided equally. In 2021, the partnership had loss of P125,624 before interest and salaries to partners. By what amount should Castillo’s and Hollanes capital account change - increase(decrease)? A. Castillo - 30,267; Hollanes (40,448) B. Castillo - 29,476; Hollanes 17,536 C. Castillo - (40,844); Hollanes 31,235 D. Castillo - 28,358; Hollanes 32,458

FINANCIAL ACCOUNTING
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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Castillo, Labasan and Hollanes are partners with average capital balances during 2021 of
P472,500, P238,650 and P162,350 respectively. The partners receive 10% interest in their average
capital balances after deducting salaries of P122,325 to Castillo and P82,625 to Hollanes, the residual
profit or loss are divided equally. In 2021, the partnership had loss of P125,624 before interest and
salaries to partners. By what amount should Castillo’s and Hollanes capital account change -
increase(decrease)?


A. Castillo - 30,267; Hollanes (40,448)
B. Castillo - 29,476; Hollanes 17,536
C. Castillo - (40,844); Hollanes 31,235
D. Castillo - 28,358; Hollanes 32,458

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