JJ and KK are partners who shares profits and losses in the ratio of 60% and 40% respectively.  JJ’s salary is P60, 000 and P30, 000 for KK.  The partners are also paid interest on their average capital balances.  In 20x1, JJ received P30, 000 of interest and KK, P12, 000.  The profit and loss allocation is determined after deductions for the salary and interest payments.  If KK’s share in the residual income (income after deducting salaries and interest)) was P60,000 in 20x1, what was the total partnership income? P192,000 P345,000 P282,000 P387,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
  1. JJ and KK are partners who shares profits and losses in the ratio of 60% and 40% respectively.  JJ’s salary is P60, 000 and P30, 000 for KK.  The partners are also paid interest on their average capital balances.  In 20x1, JJ received P30, 000 of interest and KK, P12, 000.  The profit and loss allocation is determined after deductions for the salary and interest payments.  If KK’s share in the residual income (income after deducting salaries and interest)) was P60,000 in 20x1, what was the total partnership income?

P192,000

P345,000

P282,000

P387,000

 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Partnership Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education