he partnership agreement of Zuniga, Armenta & Galang provided for the year end allocation of profit in the following order: *First, Zubiga is to receive 10% of profit up to 200,000 and 20% over 200,000 *Second, Armenta and Galang each are to receive 5% of the remaining profit over 300,000 *The balance of profit is to be allocated equally among the three partners The partnership’s 2021 profit was 500,000 before any allocations to partners. What amount should be allocated to Zuniga?
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.
The
profit in the following order:
*First, Zubiga is to receive 10% of profit up to 200,000 and 20% over 200,000
*Second, Armenta and Galang each are to receive 5% of the remaining profit over 300,000
*The balance of profit is to be allocated equally among the three partners
The partnership’s 2021 profit was 500,000 before any allocations to partners. What amount should be
allocated to Zuniga?
A. 202,000
B. 216,000
C. 206,000
D. 220,000
Step by step
Solved in 3 steps
