In 2015, Pa, Ma and Tay are partners with average capital balances of P120,000, P60,000 and P40,000 respectively. The partners receive 10% interest on their average capital balances. After deducting salaries of P30,000 to Pa and P20,000 to Ma, the residual profit or loss is divided equally. During the year, the partnership sustained a loss of P33,000, before interest and salaries to the partner
In 2015, Pa, Ma and Tay are partners with average capital balances of P120,000, P60,000 and P40,000 respectively. The partners receive 10% interest on their average capital balances. After deducting salaries of P30,000 to Pa and P20,000 to Ma, the residual profit or loss is divided equally. During the year, the partnership sustained a loss of P33,000, before interest and salaries to the partner
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. In 2015, Pa, Ma and Tay are partners with average capital balances of P120,000,
P60,000 and P40,000 respectively. The partners receive 10% interest on their average
capital balances. After deducting salaries of P30,000 to Pa and P20,000 to Ma, the
residual profit or loss is divided equally. During the year, the partnership sustained a loss
of P33,000, before interest and salaries to the partners. By what amount should Pa’s
capital account change? Indicate whether increase or decrease.
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