In January 2013, Edi Thomas and George Lopez agreed to produce and sell chocolate candiesunder the company name T&L Chocolates. Thomas contributed P580,000 in cash to the business.Lopez contributed the building and equipment, valued at P480,000 and P230,000, respectively.The partnership had an income of P675,000 during 2013 but was less successful during 2014,when income was only P580,000. f. The partners agreed to share income by paying salaries of P80,000to Thomas and P56,000 to Lopez, allowing interest of 10.5 percent ontheir original investments, and dividing the remainder by 60 percent forThomas and 40% for Lopez.DISTRIBUTION OF INCOME BASED ON AGREED AMOUNT OF SALARY PERPARTNER, INTEREST ON INITIAL INVESTMENT AND THE REMAINDER ONSPECIFIC PERCENTAGES.2013Income of PartnerIncome Distributed675,000.00Total Income For DistributionDistribution of Salaries:George Lopez(61)Edi Thomas(62)(63)Remaining Income After Salaries(64)Distribution of Interest:George Lopez(65)Edi Thomas(66)(67)Remaining Income After Salaries and InterestDistribution of Remaining Amount:George Lopez(68)Edi Thomas(69)(70)Remaining income(71)Income of Partners(72)(73)P675,000.002014Income of PartnerIncome DistributedTotal Income For DistributionP580,000.00Distribution of Salaries:George Lopez(74)Edi Thomas(75)(76)Remaining Income After Salaries(77)Distribution of Interest:George Lopez(78)Edi Thomas(79)(80)Remaining Income After Salaries and InterestDistribution of Remaining Amount:George Lopez(81)Edi Thomas(82)(83)(84)Remaining incomeIncome of Partners(85)(86)580,000.00P

f. The partners agreed to share income by paying salaries of $80,000 to Thomas and P56,000 to Lopez, allowing interest of 10.5 percent on their original investments, and dividing the remainder by 60 percent for Thomas and 40% for Lopez.

f. The partners agreed to share income by paying salaries of $80,000 to Thomas and P56,000 to Lopez, allowing interest of 10.5 percent on their original investments, and dividing the remainder by 60 percent for Thomas and 40% for Lopez.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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