Elisa Diaz and Ma. Concepcion Manalo formed a partnership, investing P330,000 and * P110,000, respectively. Determine the partners' participation in the 2016 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. 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. e.

Q: Briefly explain the difference between gross profit, net profit and EBIT.

A: Gross Profit is computed by deducting Cost of goods sold from Sales. Gross profit is the profit a…

Q: Describe when and how a net operating loss carryforward and a net operating losscarryback are…

A: Net Operating Loss Carryforward:   The net operating loss is considered as negative taxable income.…

Q: Explain the components of non operating income.

A: Non Operating Income is that part of an organisation's income that is obtained from activities not…

Q: What does the accrual-accounting model measures?

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Define goodwill for accounting purposes

A: When one firm is acquired by another, an intangible asset known as goodwill is transferred together…

Q: When a loss contingency is recognized, where is it reported on the income statement?

A: A financial statement that lists the company's earnings and expenses is called an income statement.…

Q: How can we determine the net income from operations and then adjust the net income?

A:

Q: Distinguish between cash-basis net income and accrual-basis net income.

A:

Q: What is the relationship between depreciation and net income?

A: Depreciation is the part of cost of a asset which is charged to income statement yearly as a expense…

Q: Explain the accounting for gain and loss ­contingencies.

A: Contingencies:   Contingency is a situation where the outcome becomes uncertain and is resolved in…

Q: allocation of income or loss to have economic effect

A: Income or loss is the net result of operational activities of a business conducted during a…

Q: What factors need to be considered in determining whether a receipt is of an income or of a capital…

A: The essential distinction between Capital Receipt and Income is the "purpose" with which the asset…

Q: The purpose of a statement of retained earning is to ?

A: Statement of Retained earnings is prepared to show the details of changes occurred in equity over an…

Q: E-Tech Initiatives Limited plans to issue $650,000, 10-year, 7.00 percent bonds. Interest is payable…

A: Journal entry to record Issuance of bonds payable:

Q: Define revenue-producing assets.

A: Current assets: The assets which could be converted into cash within one year like accounts…

Q: What is the accrual basis accounting?

A: Definition:   Accrued revenue: Accrued revenue refers to the revenues that are generated from the…

Q: Explain the relationship between the Statement of Comprehensive Income and the Statement of Profit…

A: The results or the performance of the business for a particular period of time is shown in the…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.