Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 800,000 4/1 160,000 11/1 60,000 J enson, Capital 9/1 3/1 180,000 1/1 1,200,000 140,000 7/1 10/1 100,000 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions:
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.
![Exercise 3-2 (Division of Profit; Interest on Average Capital)
Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as
follows:
Danica, Capital
120,000 1/1 800,000
4/1 160,000
11/1 60,000
J enson. Capital
3/1 180,000 1/1 1,200,000
7/1
9/1
140,000
100,000
10/1
Profit of the partnership is P250,000 for the year. Determine the partners shared profit under
the following assumptions:
1. Each partner is to be credited 12% interest on his average capital.
2. Any remaining profit or loss is to be divided equally.
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