Interest on capital and bonus A and B formed a partnership. The partnership agreement stipul following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?
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.
![Problem 1:
Interest on capital and bonus A and B formed a partnership. The partnership agreement stipulate the
following:
a. Monthly salary of P5,000 for A.
b. 20% bonus to A, before deductions for salary, interest, and bonus.
c. 10% interest in the weighted average capital of B.
d. Salary, bonus and interest are considered partnership expenses.
The result of operations show the following:
Revenues P150,000
Expenses (including salary, interest and bonus) (120,000)
Profit P30,000
The weighted average capital balance of B's capital account is P100,000
Required: How much is the bonus of A?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F49a9f7e1-b44c-42e9-8fe6-287376b1b416%2F6ae7cb6d-c3bd-470d-b9d9-ed0c2c24bf30%2Fr8lvbj_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)