In its first year of operations, A and B's partnership business- earned profit of P2,500,000. It was agreed that A is to have an annual salary allowance of P100,000 and a 20% bonus based on profit after deducting the salary and the bonus. However, there has been no stipulation on how the remaining profit is to be shared between A and B. A contributed P300,000, while B contributed P500,000. Which of the following statements is correct? a. A will receive a greater share in the partnership profit. p. B will receive a greater share in the partnership profit. E. A and B will receive the same amounts. d. The problem is vague and grossly erroneous.

In its first year of operations, A and B's partnership business- earned profit of P2,500,000. It was agreed that A is to have an annual salary allowance of P100,000 and a 20% bonus based on profit after deducting the salary and the bonus. However, there has been no stipulation on how the remaining profit is to be shared between A and B. A contributed P300,000, while B contributed P500,000. Which of the following statements is correct? a. A will receive a greater share in the partnership profit. p. B will receive a greater share in the partnership profit. E. A and B will receive the same amounts. d. The problem is vague and grossly erroneous.

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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In its first year of operations, A and B's partnership business
earned profit of P2,500,000. It was agreed that A is to have an
annual salary allowance of P100,000 and a 20% bonus based
on profit after deducting the salary and the bonus. However,
there has been no stipulation on how the remaining profit is to
be shared between A and B. A contributed P300,000, while B
contributed P500,000. Which of the following statements is
correct?
a. A will receive a greater share in the partnership profit.
b. B will receive a greater share in the partnership profit.
c. A and B will receive the same amounts.
d. The problem is vague and grossly erroneous.

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