If the salaries are recorded in the accounts of the partnership as an expense rather than treated as an allocation of income, the total amount allocated to each partner for salaries and net income would be
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.
Partners A and B share income in the ratio of 2:1 respectively. Each partner receives an annual salary allowance of P80,000. If the salaries are recorded in the accounts of the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
