Elisa Diaz and Ma. Concepcion Manalo formed a partnership, investing P330,000 and P110,000, respectively. Determine the partners' participation in the 2019 profit of P420,000 under each of the following independent assumptions: a.) No agreement concerning division of profit. b.) Divided in the ratio of original capital investment. c.) Interest at the rate of 8% allowed on original investments and the remainder divided in the ratio of 2:3.
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.
Elisa Diaz and Ma. Concepcion Manalo formed a partnership, investing P330,000 and P110,000, respectively. Determine the partners' participation in the 2019 profit of P420,000 under each of the following independent assumptions:
a.) No agreement concerning division of profit.
b.) Divided in the ratio of original capital investment.
c.) Interest at the rate of 8% allowed on original investments and the remainder divided in the ratio of 2:3.
d.) Salary allowances of P50,000 and P70,000, respectively, and the balance to be divided equally.
e.) Allowance of interest at the rate of 8% on original investments, salary allowances of P50,000 and P70,000, respectively, and the remainder to be divided equally.
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