lad the 9. Michael and Jackson are partners following transactions during 2020: Jackson Michael Debit Credit P182,000 Debit Credit P175,500 Balance, January 1, 2020 February 28 March 31 P52,000 78,000 April 30 104,000 June 30 65,000 91,000 August 31 September 30 October 31 26,000 26,000 The Income Summary account has a credit balance of P663,000. Requirements: Prepare a statement of profit distribution for each of the following independent profit-sharing agreements: 1. In the average capital ratio. 2. Interest on average capital at 9 percent, salaries of P78,000 to Michael and P130,000 to Jackson, respectively, a bonus to Michael of 25 percent of net income after interest and salaries but before the bonus, and the balance. equally. 3. Interest at 10 percent on the amount by which the ending capia balance exceeds the beginning balance and the balance equally. 4. Salaries of P104,000 and P156,000 to Michael and Jackson, respective a bonus to Michael of 25 percent of net income after salaries and t bonus, and the balance equally.
lad the 9. Michael and Jackson are partners following transactions during 2020: Jackson Michael Debit Credit P182,000 Debit Credit P175,500 Balance, January 1, 2020 February 28 March 31 P52,000 78,000 April 30 104,000 June 30 65,000 91,000 August 31 September 30 October 31 26,000 26,000 The Income Summary account has a credit balance of P663,000. Requirements: Prepare a statement of profit distribution for each of the following independent profit-sharing agreements: 1. In the average capital ratio. 2. Interest on average capital at 9 percent, salaries of P78,000 to Michael and P130,000 to Jackson, respectively, a bonus to Michael of 25 percent of net income after interest and salaries but before the bonus, and the balance. equally. 3. Interest at 10 percent on the amount by which the ending capia balance exceeds the beginning balance and the balance equally. 4. Salaries of P104,000 and P156,000 to Michael and Jackson, respective a bonus to Michael of 25 percent of net income after salaries and t bonus, and the balance equally.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
Transcribed Image Text:9. Michael and Jackson are partners with capital accounts that had
following transactions during 2020:
the
Michael
Jackson
Debit
Credit
P182,000
Debit
Credit
P175,500
Balance, January 1, 2020
February 28
P52,000
78,000
March 31
104,000
April 30
65,000
June 30
91,000
August 31
September 30
October 31
26,000
26,000
The Income Summary account has a credit balance of P663,000.
Requirements: Prepare a statement of profit distribution for each of the
following independent profit-sharing agreements:
1. In the average capital ratio.
2. Interest on average capital at 9 percent, salaries of P78,000 to Michael
and P130,000 to Jackson, respectively, a bonus to Michael of 25 percent
of net income after interest and salaries but before the bonus, and the
balance.equally.
3. Interest at 10 percent on the amount by which the ending caplie
balance exceeds the beginning balance and the balance equally.
4. Salaries of P104,000 and P156,000 to Michael and Jackson, respective
a bonus to Michael of 25 percent of net income after salaries and t
bonus, and the balance equally.
L--L
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