In January 2013, Edi Thomas and George Lopez agreed to produce and sell chocolate candiesunder the company name T&L Chocolates. Thomas contributed P580,000 in cash to the business.Lopez contributed the building and equipment, valued at P480,000 and P230,000, respectively.The partnership had an income of P675,000 during 2013 but was less successful during 2014,when income was only P580,000. d. The partners agreed to share income by allowing interest of 12percent on their original investments and dividing the remainderequally.DISTRIBUTION OF INCOME BASED ON INTEREST ON INVESTMENTS ANDREMAINDER SHARED EQUALLY2013Income of PartnerIncome Distributed675,000.00Total Income for DistributionPDistribution of Interest:George Lopez(21)Edi Thomas(22)(23)Remaining Income After Interest(24)Equal distribution of remaining income:George Lopez(25)Edi Thomas(26)(27)Remaining income(28)Income of Partners(29)(30)P675,000.002014Income of PartnerIncome DistributedTotal Income for DistributionP580,000.00Distribution of Interest:George Lopez(31)Edi Thomas(32)(33)Remaining Income After Interest(34)Equal distribution of remaining income:George Lopez(35)Edi Thomas(36)(37)Remaining income(38)Income of Partners(39)(40)580,000.00P

Answered: d. The partners agreed to share income…

d. The partners agreed to share income by allowing interest of 12 percent on their original investments and dividing the remainder equally.

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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