Garcia and Henson formed a partnership on January 2, 2020 and agreed to share profits 90% and 10%, respectively. Garcia contributed capital of P25,000. Henson contributed no capital but has a specialized expertise and manages the firm full time. There were no withdrawals during the year. The partnership agreement provides for the following: • Capital accounts are to be credited annually with interest at 5% of beginning capital. • Henson is to be paid a salary of Pl1,000 a month. Henson is to receive a bonus of 20% of income calculated before deducting his salary, bonus and interest on capital account. • The partnership 2005 income statement as follows: Revenues P 96,450 Expenses (including salary, interest, and bonus) 49,700 Net income P 46,750 What is Henson's 2020 bonus?

Garcia and Henson formed a partnership on January 2, 2020 and agreed to share profits 90% and 10%, respectively. Garcia contributed capital of P25,000. Henson contributed no capital but has a specialized expertise and manages the firm full time. There were no withdrawals during the year. The partnership agreement provides for the following: • Capital accounts are to be credited annually with interest at 5% of beginning capital. • Henson is to be paid a salary of Pl1,000 a month. Henson is to receive a bonus of 20% of income calculated before deducting his salary, bonus and interest on capital account. • The partnership 2005 income statement as follows: Revenues P 96,450 Expenses (including salary, interest, and bonus) 49,700 Net income P 46,750 What is Henson's 2020 bonus?

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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Question

Garcia and Henson formed a partnership on January 2, 2020 and agreed to share profits 90% and
10%, respectively. Garcia contributed capital of P25,000. Henson contributed no capital but has a
specialized expertise and manages the firm full time. There were no withdrawals during the year.
The partnership agreement provides for the following:
• Capital accounts are to be credited annually with interest at 5% of beginning capital.
• Henson is to be paid a salary of P1,000 a month.
• Henson is to receive a bonus of 20% of income calculated before deducting his salary, bonus
and interest on capital account.
• The partnership 2005 income statement as follows:
Revenues
P 96,450
Expenses (including salary, interest, and bonus)
49,700
Net income
P 46,750
What is Henson's 2020 bonus?

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