Exercise 3-5. Distribution of net income by providing salaries, interest and bonus The beginning capital contributions of the partners in the newly formed partnership are as follows: Clara, P250,000; Mara, P150,000; and Angela, P200,000. In its first nine months of operation, the partnership of Clara, Mara and Angela made a net income of P290,000, before providing for 20% annual interest on beginning capital balances and monthly salary allowance of P10,000, P5,000, and P2,500, respectively. Mara is entitled to a 25% bonus on net income after interest and salaries. Any remainder will be shared by the partners in the ratio of 5:3:2. Required: Compute for the share of Clara, Mara and Angela in the partnership profits.
Exercise 3-5. Distribution of net income by providing salaries, interest and bonus The beginning capital contributions of the partners in the newly formed partnership are as follows: Clara, P250,000; Mara, P150,000; and Angela, P200,000. In its first nine months of operation, the partnership of Clara, Mara and Angela made a net income of P290,000, before providing for 20% annual interest on beginning capital balances and monthly salary allowance of P10,000, P5,000, and P2,500, respectively. Mara is entitled to a 25% bonus on net income after interest and salaries. Any remainder will be shared by the partners in the ratio of 5:3:2. Required: Compute for the share of Clara, Mara and Angela in the partnership profits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
typ3written pl3ase not image.
Transcribed Image Text:Exercise 3-5.
Distribution of net income by providing
salaries, interest and bonus
The beginning capital contributions of the partners in the newly
formed partnership are as follows: Clara, P250,000; Mara,
P150,000; and Angela, P200,000. In its first nine months of
operation, the partnership of Clara, Mara and Angela made a net
income of P290,000, before providing for 20% annual interest
on beginning capital balances and monthly salary allowance of
P10,000, P5,000, and P2,500, respectively. Mara is entitled to a
25% bonus on net income after interest and salaries. Any
remainder will be shared by the partners in the ratio of 5:3:2.
Required:
Compute for the share of Clara, Mara and Angela in the
partnership profits.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education