Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:Juan, capital ending balance – P 3,000,000Debits: June 1 - P 500,000Credits: March 30 – P 1,000,000Credits: October 30 – P 500,000 Pedro, capital ending capital balance – P 4,500,000Credits: May 1 – P 1,000,000Credits: August 31 – P 1,000,000Income for the year amounted to P 300,000. How much profit will be distributed to Juan? Problem Solving:Juan and Pedro's partnership agreement shows that they willreceive a salary of P 150,000 and P 100,000, respectively. Shouldthere be a remainder, such will be divided based on their averagecapital balances. Below shows information in their respectivecapital balances:Juan, capital ending balance -P 3,000,000Debits: June 1-P 500,000Credits: March 30 – P 1,000,000Credits: October 30 - P 500,000Pedro, capital ending capital balance - P 4,500,000Credits: May 1-P1,000,000Credits: August 31 - P 1,000,000Income for the year amounted to P 300,000. How much profitwill be distributed to Juan?

The calculation of profit that will be distributed to Juan is shown hereunder : Income for the year…

Answered: Income for the year amounted to P…

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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Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:

Juan, capital ending balance – P 3,000,000
Debits: June 1 - P 500,000
Credits: March 30 – P 1,000,000
Credits: October 30 – P 500,000

Pedro, capital ending capital balance – P 4,500,000
Credits: May 1 – P 1,000,000
Credits: August 31 – P 1,000,000

Income for the year amounted to P 300,000. How much profit will be distributed to Juan?