II. Aquila partnership began its first year of operations with the following capital balances: N, Capital: P143,000 A, Capital: P104, 000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: • N was to be awarded an annual salary of P26,000 with P13,000 salary assigned to C. • Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. • The remainder was to be assigned on a 4:3:3 basis, respectively. • Each partner was allowed to withdraw up to P13,000 per year. Assume that the net loss for the first year of operations was P36,000 with net income of P42,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year.

II. Aquila partnership began its first year of operations with the following capital balances: N, Capital: P143,000 A, Capital: P104, 000 C, Capital: P143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: • N was to be awarded an annual salary of P26,000 with P13,000 salary assigned to C. • Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. • The remainder was to be assigned on a 4:3:3 basis, respectively. • Each partner was allowed to withdraw up to P13,000 per year. Assume that the net loss for the first year of operations was P36,000 with net income of P42,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year.

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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