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- A and B organized a partnership and began operations on March 1, 2019. On that date, A invested 75,000 and B invested land and building with current fair value of 40,000 and 50,000 respectively. B also invested an additional 30,000 to the partnership on November 1, 2019 due to some cash flow issues. The partnership contract provides that an annual salary of 9,000 and 12,000 be provided to A and B, respectively. Interest on average capital balances of 10% shall also be provided. Any remainder profit or loss shall be allocated based on a 60:40 ratio. The annual salary was to be withdrawn by each partner in 12 monthly installments. During the fiscal year ending February 29, 2020, the partnership had sales amounting to 250,000, cost of goods sold of 140,000 and total operating expenses of 50,000 (excluding the partners’ salaries and interest on average capital balances. Each partner made monthly cash drawings in accordance with the partnership contract. Requirements: Compute for the…The partnership agreement of A, B and C provides for the year-end allocation of net income in the following order: First, A is to receive 10% of net income up to P100,000 and 15% over P100,000 Second, B and C each are to receive 10% of the remaining income over P150,000. The balance of income is to be allocated equally among the three partners. The partnership’s 2021 net income was P280,000 before any allocations to partners. What amount should be allocated to A? Group of answer choices 111,800 93,333 103,000 84,100Baldo, Celso, and Dado form a partnership on January 1, 2021, each partner investing P250,000 and agree to distribute profits equally. On August 1, 2021, Baldo was advanced P100,000 by the firm. On September 1, 2021, Celso made a loan to the firm of P200,000. Interest is to be charged on advances to partners and credited on loans by partners at the rate of 12%. Business is unsatisfactory and the partners decide to dissolve. Dado is allowed special compensation of P25,000 for managing the sale of assets and settlement with creditors. On December 31, all assets have been sold, outside creditors have been paid, and cash of P350,000 is distributed to partners. All partners are personally solvent and final settlement is made among partners on February 10, 2022. How much Celso should receive from the P350,000 cash?
- The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: • Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. • Each partner receives 10 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones King Lane The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Net income Bonus Interest $ 190,000 380,000 570,000 Remainder to allocate Total allocation Jones King Lane TotalEnergetic and Faithful decided to form a partnership on June 1, 2021 by investing P100,000 and P150,000 respectively. They agreed that profits are to be divided as follows: Partners are to receive a 10% interest on beginning capital. Each partner is to receive an annual salary of P24,000. Energetic, the managing partner, is to receive a bonus equivalent to 10% of the net income after interest, salaries and bonus. The remaining profit is to be divided equally. Energetic invested P50,000 on August 1 and withdrew cash amounting to P10,000 on December 1. Faithful invested P15,000 on September 1 and withdrew cash amounting to 5,000 in November 1. During the year, the partnership had a net income of P80,000. How much is the ending capital of Energetic and Faithful?The partnership agreement of Dan, Hen, and Bai provides that profits are to be divided as follows: Bai receives a salary of $24,000 and Hen receives a salary of $18,000 for the time spent in the business; All partners receive 10% interest on average capital balances; Remaining profits and losses are divided equally among the three partners. On January 1, 2021, the capital balances were Dan $200,000; Hen, $160,000; and Bai, $150,000. Dan invested an additional $40,000 on July 1 and withdrew $40,000 on October 1. Hen and Bai had drawings of $18,000 and $24,000, respectively during the year.The Net Income of the partnership is $28,000. 1) What was Dan's total share of Net Income for 2021? 2) What was Hen's total share of Net Income for 2021? 3) What was Bai's total share of Net Income for 2021?
- Net income for AB partnership for 2021 was $125,000. A and B have agreed to distribute partnership net income according to the following plan as shown in the image. Additional Information for 2021 follows: A began the year with a capital balance of $75,000 B began the year with a capital balance of $100,000 On March 1, A invested an additional $25,000 into the partnership On October 1, B invested an additional $20,000 into the partnership Throughout 2021, each partner withdrew $200 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions. A. Allocate the income to partners A and B B. Compute for the ending capital balances of the partners.The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.A and B formed a Partnership on January 1, 2020. Partner A’s contributed capital amounted to P40,000, while partner B’s contributed capital amounted to P20,000. The Partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of the beginning capital. Partner B is to be paid salary of P6,000 quarterly. Partner B is to receive a bonus of 10% based on the net income The Partnership's income statement for the year ended is as follows: Revenues, P105,000Expenses (including salary, interest, and bonus), 30,000Net income, 75,000 What is partner's B 2020 bonus? Group of answer choices 9,273 7,500 9,333 11,333
- Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2021 is P300,000 for Xavier, P250,000 for Young, and P325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2021. Xavier and Young receive salary allocations of P10,000 and P15,000, respectively. If partnership net income is above P25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 23.5 to Xavier, Young, and Zane, respectively. If the the partnership net income for 2021 is P250,000, the total share of Xavier, Young and Zane, respectively are:ces Gorman and Morton form a partnership on May 1, 2022. Gorman contributes cash of $73,000; Morton conveys title to the following properties to the partnership: Equipment Licensing agreements Book Value $ 26,500 46,500 Fair Value $51,000 59,000 The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula: Gorman receives a compensation allowance of $1,300 per month. All remaining profits and losses are split 40.60 between Gorman and Morton, respectively. Each partner can make annual cash drawings of $5,000 beginning in 2023. Net income of $22,500 is earned by the business during 2022. Steele is invited to join the partnership on January 1, 2023. Because of her business reputation and financial expertise, she is given a 40 percent interest for $77,000 cash. The bonus approach is used to record this investment,…Aishah, Balan and Chong decided to enter into a partnership agreement as from 1 July 2019 with the following provisions: i . Aishah to contribute $20,000 cash, inventory the fair value of which was $42,500, plant and machinery $78,600, accounts receivable totalling $12,700. ii. Balan to contribute $37 500 cash and act as manager for the business at an annual salary of $32,000 to be allocated to him at the end of each year. iii. Chong to contribute $16,500 cash, land $120,000, premises $240,000, funiture and fittings $40,500, motor vehicles $31,500. A mortgage of $180.000 secured over the premises was outstanding and the partnership agreed to assume the mortgage. iv . Profits or losses of the firm are to be divided between or borne by Aishah, Balan and Chong in the proportion of 2:1:3 respectively. V. Interest to be allowed at 8% p.a. on the capital contribution by the partners. Interest at 10% p.a. to be charged on partners' drawings. During the year ended 30 June 2020, the…
