Distribution of Profits or Losses Based on Partner's Agreement Labasan, Gabayan, and Villanueva are manufacturer's representatives in the architecture business. Their capital accounts were as follows: Labasan, Capital Gabayan, Capital Villanueva, Capital 9/1 80,000 1/1 300,000 3/190,000 1/1 400,000 8/1 120,000 |1/1 500,000 5/1 60,000 7/1 50,000 4/1 70,000 9/1 40,000 6/1 30,000 Required: For each of the following independent profit and loss agreement, prepare the profit distribution schedule: 1. Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to Villanueva. Labasan receives a bonus of 5% profit after bonus. Interest is 10% of ending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a 3:3:4 ratio. Profit was P789,600. 2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800 3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400
Distribution of Profits or Losses Based on Partner's Agreement Labasan, Gabayan, and Villanueva are manufacturer's representatives in the architecture business. Their capital accounts were as follows: Labasan, Capital Gabayan, Capital Villanueva, Capital 9/1 80,000 1/1 300,000 3/190,000 1/1 400,000 8/1 120,000 |1/1 500,000 5/1 60,000 7/1 50,000 4/1 70,000 9/1 40,000 6/1 30,000 Required: For each of the following independent profit and loss agreement, prepare the profit distribution schedule: 1. Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to Villanueva. Labasan receives a bonus of 5% profit after bonus. Interest is 10% of ending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a 3:3:4 ratio. Profit was P789,600. 2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800 3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Distribution of Profits or Losses Based on Partner's Agreement
Labasan, Gabayan, and Villanueva are manufacturer's representatives in the architecture
business. Their capital accounts were as follows:
Labasan, Capital
Gabayan, Capital
Villanueva, Capital
9/1 80,000 1/1 300,000
3/1 90,000 1/1 400,000
8/1 120,000 1/1 500,000
5/1 60,000
7/1 50,000
4/1 70,000
9/1 40,000
6/1 30,000
Required:
For each of the following independent profit and loss agreement, prepare the profit distribution
schedule:
1. Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to Villanueva. Labasan
receives a bonus of 5% profit after bonus. Interest is 10% of ending capital balances. Labasan,
Gabayan, and Villanueva divide any remainder in a 3:3:4 ratio. Profit was P789,600.
2. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to
Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus
and salary. Any remainder is divided equally. Profit was P680,800
ww.
3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to
Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital
balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was
www www
P929,400
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