Determine the partners’ share in profit or loss for each of the situations above assuming: (1) Profit of P1,500,000 (2) Profit of P660,000
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.
Stephanie Calamba and Allan Brillantes decided to form a
Brillantes, P300,000. Calamba will devote full time to the business, and Brillantes on part-time only. The following plans for
the division of profits are being considered:
- Interest of 10% on original investments, salary allowances of P340,000 to Calamba and P170,000 to Brillantes, and
the remainder equally.
- Plan (e), except that Calamba is also to be allowed a bonus equal to the 20% of the amount by which profit exceeds
the salary allowances.
Determine the partners’ share in profit or loss for each of the situations above assuming:
(1) Profit of P1,500,000
(2) Profit of P660,000
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