Edmund, Harry and Vincent formed a partnership on January 1, 2018. Each contributed P120,000. Salaries were to be allocated as follows: Edmund- P30,000 Harry- P30,000 Vincent- P45,000 Drawings were equal to salaries and be taken out evenly throughout the year. With sufficient partnership net income, Edmund and Harry could split a bonus equal to 25% of partnership net income after salaries and bonus (in no event could the bonus go below zero). Remaining profits were to be divided as follows: 30% for Edmund; 30% for Harry, and 40% for Vincent. For the year, partnership net income was P120,000. Compute the ending capital for each partner:
Edmund, Harry and Vincent formed a partnership on January 1, 2018. Each contributed P120,000. Salaries were to be allocated as follows: Edmund- P30,000 Harry- P30,000 Vincent- P45,000 Drawings were equal to salaries and be taken out evenly throughout the year. With sufficient partnership net income, Edmund and Harry could split a bonus equal to 25% of partnership net income after salaries and bonus (in no event could the bonus go below zero). Remaining profits were to be divided as follows: 30% for Edmund; 30% for Harry, and 40% for Vincent. For the year, partnership net income was P120,000. Compute the ending capital for each partner:
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 6CPA
Related questions
Question
Edmund, Harry and Vincent formed a partnership on January 1, 2018. Each contributed P120,000.
Salaries were to be allocated as follows:
Edmund- P30,000 Harry- P30,000 Vincent- P45,000
Drawings were equal to salaries and be taken out evenly throughout the year.
With sufficient partnership net income, Edmund and Harry could split a bonus equal to 25% of partnership net income after salaries and bonus (in no event could the bonus go below zero).
Remaining profits were to be divided as follows: 30% for Edmund; 30% for Harry, and 40% for Vincent. For the year, partnership net income was P120,000.
Compute the ending capital for each partner:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College