Exercise 3-8. Distribution of Net Income to partners On March 1, 2023 Glenda and Harry formed GH Partnership respectively. Glenda is appointed as the managing partner. with initial investment of P800,000 and P1,200,000, 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.

Exercise 3-8. Distribution of Net Income to partners On March 1, 2023 Glenda and Harry formed GH Partnership respectively. Glenda is appointed as the managing partner. with initial investment of P800,000 and P1,200,000, 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A partnership begins its first year of operations with the following capital balances: Allegan,…

A: The partnership comes into existence when two or more persons agree to do the business and share…

Q: Required: Prepare schedules that compute the balances in each partner's capital account at the end…

Q: Determine their participation in the year's net income of $107,000 under each of the following…

A: Partnership: This is the form of business entity which is formed by an agreement, owned and managed…

Q: Required information [The following information applies to the questions displayed below.] Ramer and…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: Which are the Elements of transactions Involving Interest?

A: The Answer:

Q: Emerson and Dakota formed a partnership dividing income as follows: 1. Annual salary allowance to…

A: Total net income = $233,600 Emerson Dakota Annual salary allowance 40,000 0 Interest…

Q: Ayayai Company estimates that 240.000 direct labor hours will be worked during the coming year.…

A: Variable costs are costs that varies with the change in the level of output whereas fixed costs are…

Q: Alexander, Capital $68,000 78,000 88,000 Bertrand, Capital Coloma, Capital The articles of…

A: A partnership is a form of business where two or more individuals make a partnership agreement to…

Q: On April 1, the Bruce & Duval partnership agreed to admit Singh to the partnership. Singh will…

A: Bonus capital contributed by Singh = Capital contributed by Singh - Required capital to be…

Q: Xavier and Yolanda have original investments of $50,300 and $107,800, respectively, in a…

A: Total interest = total capital x interest rate = (50300+107800) *20% = $31620 Interest to Yolanda =…

Q: The partnership agreement of Jones, King, and Lane provides for the annual allocation of the…

A: Net income is the amount of money earned by the entity after deducting the expenses from the…

Q: 1. Ceradoy, Manongsong and Anuran are partners sharlng of 3:2:1. The partnership agreement provides…

A: The residual profit seems to be the sum of profit that remains after accounting for the notion that…

Q: Question 4 Sandra Castell, Susan Huang, and Bert Zimm invested $180,000, $180,000, and $240,000,…

A: Partnership Account - A partnership is a mutual agreement enter into two or more entities for the…

Q: The Joseph and Rodin partnership agreement stipulates that profits and losses will be shared equally…

A: Distribution of profit in partnership firm :—1] Profit/Loss of the firm is distributed between the…

Q: The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a)…

A: Answer) Calculation of Amount allocated to Alix out of Net Income of $ 544,000 Alix…

Q: ^ A

A: Lets understand the basics.Management prepares budget in order to estimate future profit and…

Q: Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current…

A: a) Journal entries for the admission of Gorman are as…

Question

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.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Working Note #:- Distribution of net income

VIEW

Step 3 Final Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Required information Skip to question [The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $58,000 and $87,000, respectively. During its first year, the partnership earned $180,000. Prepare calculations showing how the $180,000 income is allocated under each separate plan for sharing income and loss. 2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $180,000. Note: Do not round intermediate calculations.
4. Show solution in good accounting form
P and T are in partnership sharing profits and losses in the ratio of 60:40. The partnership agreement provides that interest on partner’s capital account should be allowed at the rate of 10% pa. The following information has been made available for the year ended 31st Dec 2018. Net profit for the year RO 30,500 Partner P Partner T RO RO Capital Accounts on 1st Jan 2018 20,000 15,000 Current Account 1,800(Cr) 3,400 (Dr) Drawings for the year 12,785 18,275 Salary to be credited -- 6,000 Interest on drawings 640 910 You are required to: Prepare Journal Entries Prepare…
Ange partnership begins its first year of operations with the following capital balances: Ange, Capital P70,000 Bill, Capital P90,000 Cayne, Capital P110,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 10% of the beginning capital. Bill is allocated compensation of P2,000 per month. Any remaining profits of losses are allocated on a 4:2:4 basis, respectively. Each partner is allowed to withdraw up to P3,000 cash per year. Assuming that the net income, is 50,000 and that each partner withdraws the maximum amount allowed, what is the balance of the capital of partner Ange at the end of that year?
= Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv Newcomb have balances of $99,000 and $149,000, respectively. Rose Clayton is to be admitted to the partnership, contributing $66,000 cash to the partnership, for which she is to-receive an ownership equity of $86,000. All partners share equally in income. a. Journalize the entry to record the admission of Rose Clayton, who is to receive a bonus of $20,000. If an amount box does not require an entry, leave it blank. b. What are the capital balances of each partner after the admission of the new partner? Partner ▼ Elayne Summers Murv Newcomb Rose Clayton $ Balance c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the new partner being admitted. For example, if the market price of land doubled prior to admitting…
Vikram Bhai
SCORE: NAME: PROFESSOR: SECTION: Multiple Choice 1. Ceradoy, Manongsong and Anuran are partners sharing residual profits in the ratio of 3:2:1. The partnership agreement provides for 8% interest on capital and a salary for Manongsong of P80,000 per annum. Profit for 2015 was P840,000 and the year-end balances on partners' capital accounts are as follows: Ceradoy, P200,000; Manongsong, P150,000 and Anuran, P120,000. What was Anuran's share of residual profits for 2015? a. P120,400 b. P126,670 C. P130,000 d. P140,000 2 Malaluan and Baral are in partnership. They share profits in the ratio 3:2 and close their accounts on June 30 each year.On Jan. 1, 2015, Castro joined the partnership. The profit-sharing ratio was revised to become Malaluan 50%, Baral 25% and Castro 25%, after providing for annual salaries as follows: Baral, P20,000 and Castro, P12,000. The partnership profit for the year ended June 30, 2015 was P480,000, accruing evenly over the year. What are the partners' total share…
EXERCISE 6-13. Problem Solving 4. Alloy and Aeson are partners who share profits and losses in the ratio 60% and 40%, respectively. Alloy and Aeson are given salary allowances of P120,000 and P60,000, respectively. The partners are also paid interest on their ending capital balances. In 2019, amounts of interest received by Alloy and Aeson were P60,000 and P24,000, respectively. Subsequent allocations using profit and loss ratio were then made after salary allowances and interest payments had been provided for. You are required to determine the total partnership net income if Aeson's share in the residual income (balance after salary allowances and interest) was P120,000 in 2019.
Scenario B: Partners A, B, and C operate a business with profit sharing agreement ratios of 5: 3:2, and capital balances of $300,000, $200,000, and $100,000 respectively. The total income for the year is $180,000. Each partner receives a fixed salary of $50, 000, and they are entitled to earn 10% interest on their capital balances. Calculate the total income allocated to Partner
Rahul
Emerson and Dakota formed a partnership dividing income as follows: 1. Annual salary allowance to Emerson of $34,000 2. Interest of 10% on each partner's capital balance on January 1 3. Any remaining net income divided equally. Emerson and Dakota had $34,000 and $142,000, respectively, in their January 1 capital balances. Net income for the year was $230,800. How much net income should be distributed to Dakota?
Homework Activity 2 AB and C are in partnership sharing profits and losses in the ratio of 3:2:1. On 1* Jan 2019, their В 20,000 capital balances are: A 30,000 C 10,000 The terms of partnership provides that a. All partners are eligible for interest on capital @6% b. All partners are liable to pay interest on drawings @ 4% c. All Partners are eligible for salary @ RO 200 per month The net profit for the year ended 31s* Dec 2019 before making the above terms was 18,000. The drawings of the partners were: A 3,000 B 2,000 C 1,000 You are requested to prepare I. Profit and Loss Appropriations Account II. Capital accounts of three partners under fluctuating capital method