Geehan partnership begins its first year of operations with Gee, capital of 160,000 and Han capital of 80,000. According to the partnership agreement, all profits will be distributed as follows: a. Gee will be allowed a monthly salary of P10,000. b. The partners will be allowed with interest equal to 10% of the capital balance as of the first day of the year. c. Gee will be allowed a bonus of 10% of the net income after salaries. d. The remainder will be divided on the basis of 60:40 for the first year and 50:50 for the second year. Assume further, that the partnership generated Net Income of P320,000 for the first year and P200,000 for the second year. 1. What is the share of Han in the net income for the first year? 2. What is the share of Gee in the net income for the first year? 3. How much is the adjusted capital of Gee at the beginning of second year? 4. What is the share of Han in the net income for the second year? 5. What is the share of Gee in the net income for the second year?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Geehan partnership begins its first year of operations with Gee, capital of 160,000 and Han capital of 80,000. According to the partnership agreement, all profits will be distributed as follows:
a. Gee will be allowed a monthly salary of P10,000. b. The partners will be allowed with interest equal to 10% of the capital balance as of the first day of the year. c. Gee will be allowed a bonus of 10% of the net income after salaries. d. The remainder will be divided on the basis of 60:40 for the first year and 50:50 for the second year.
Assume further, that the partnership generated Net Income of P320,000 for the first year and P200,000 for the second year. 1. What is the share of Han in the net income for the first year? 2. What is the share of Gee in the net income for the first year? 3. How much is the adjusted capital of Gee at the beginning of second year? 4. What is the share of Han in the net income for the second year? 5. What is the share of Gee in the net income for the second year?
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