Exercise 3 -7 1. Martin and Isidore form a partnership with investments of P 1,000,000 and P 500,000 respectively. Compute their share in the net income of P210,000 for six months of the partnership's operation under the following agreement: a. 10% interest is allowed on partners' original investments. b. Allowance of annual salary of P120,000 to Martin and P144,000 to Isidore. c. Balance 2:1 respectively. 2. With the same information in number 1, assuming the partnership incurred a loss of P72,000 for the instead of a net income of P210,000 for six months. year

Exercise 3 -7 1. Martin and Isidore form a partnership with investments of P 1,000,000 and P 500,000 respectively. Compute their share in the net income of P210,000 for six months of the partnership's operation under the following agreement: a. 10% interest is allowed on partners' original investments. b. Allowance of annual salary of P120,000 to Martin and P144,000 to Isidore. c. Balance 2:1 respectively. 2. With the same information in number 1, assuming the partnership incurred a loss of P72,000 for the instead of a net income of P210,000 for six months. year

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 2SEB

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Exercise 3 -7 1. Martin and Isidore form a partnership with investments of P 1,000,000 and P 500,000 respectively. Compute their share in the net income of P210,000 for six months of the partnership's operation under the following agreement: a. 10% interest is allowed on partners' original investments. b. Allowance of annual salary of P120,000 to Martin and P144,000 to Isidore. c. Balance 2:1 respectively. 2. With the same information in number 1, assuming the partnership incurred a loss of P72,000 for the year instead of a net income of P210,000 for six months.
Exercise 3-8. Distribution of Net Income to partners On March 1, 2023 Glenda and Harry formed GH Partnership with initial investment of P800,000 and P1,200,000, respectively. Glenda is appointed as the managing partner. The articles of co-partnership provides that profit or loss shall be distributed accordingly: 10% interest on original capital contribution ratio. Monthly salary of P10,000 and P5,000 respectively for Glenda and Harry. . Glenda shall be entitled to bonus equivalent to 10% of net income after interest, and salary. The remainder shall be distributed in ratio of 4:6 for Glenda and Harry, respectively. ● For the year ended December 31, 2023, the partnership reported net income of P1,000,000. Required: Compute for the share in net income of Glenda for the year ended December 31, 2023.
Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows: A B C Salary allowance P30,000 P10,000 P40,000Interest on ave. capital balance 10% 10% 10% Remainder 40% 40% 20% The average capital balances for the current year were P50,000 for A, P30,000 for B, and P20,000 FOR c. Assuming a current year net income of P150,000, what amount should be allocated to each partner? Assuming a current year net income of P50,000, what amount should be allocated to each partner?
Problem 1: Interest on capital and bonus A and B formed a partnership. The partnership agreement stipulate the following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?
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4. A and B formed a partnership. The partnership agreement stipulates the following: • Monthly salaries of P6,000 for A and P2,000 for B. • 20% bonus to A, after deductions for salary, interest, and bonus. 10% interest on the weighted average capital of B. Any remaining amount is shared equally. The partnership's records show the following: Revenues Expenses (including salary, interest, and bonus) Profit 150,000 (120,000) 30,000 n this message ose of the indiw ender and may not v reflect the views f Philippine Cultural College Page | 2 The movements in B's capital account are as follows: В. Сарital 60,000 beg. Aug. 1 withdrawal 30,000| 20,000 Mar. 31 additional investment Oct. 1 additional investment Dec. 31 additional investment 40,000 10,000 100,00 end. How much is the share of B in the partnership profit? a. 93,000 b. 52,250 с. 46,250 d. 45,000
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Exercises 3-5 (Division of Profit; Interest on Average Capital and Salaries to Partners) The partnership of Ben and Ban has the following provisions in the partnership agreement: 1. A partner earns 10% interest on the excess of his average capital over the other partner. 2. Ben and Ban are allowed annual salaries of P300,000 and P200,000, respectively. 3. Any remaining profit or loss is to be divided in the ratio of 40:60. The average capital of Ben is P1,000,000 and that of Bunye is P500,000. Instructions: Prepare a profit distribution schedule assuming the profit of the partnership is (a) P800,000; and (b) P400,000. You may modify your answer sheet to fit your solution. Follow the instructions strictly. Answer what is asked only. Note: