Left and Right are partners. Their capital accounts during 2020 were as follows: Left, Capital 8/23 P6,000 1/1 4/3 10/31 Right, Capital 3/5 P9,000 1/1 7/6 | 10/7 PS0,000 7,000 5,000 P30,000 8,000 6,000 Partnership net income is P50,000 for the year. The partuership agroemeut provides for the division of net income as follows: Each partner is credited 10 percent interest on his or her average capital. • Because of prior work experience, left is entitled to an anımal salary of P12,000 an Right is credited with P8,000. • Any remainder income or loss is to be allocated based on beginning capital. How much of the partnership net income for 2020 should be assigned to Left and Right?
Left and Right are partners. Their capital accounts during 2020 were as follows: Left, Capital 8/23 P6,000 1/1 4/3 10/31 Right, Capital 3/5 P9,000 1/1 7/6 | 10/7 PS0,000 7,000 5,000 P30,000 8,000 6,000 Partnership net income is P50,000 for the year. The partuership agroemeut provides for the division of net income as follows: Each partner is credited 10 percent interest on his or her average capital. • Because of prior work experience, left is entitled to an anımal salary of P12,000 an Right is credited with P8,000. • Any remainder income or loss is to be allocated based on beginning capital. How much of the partnership net income for 2020 should be assigned to Left and Right?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A. Left, P18,750; Right; P31,250
B. Left, P23,667; Right; P26,333
C. Left, P25,000; Right; P25,000
D. Left, P26,388; Right; P23,612
Transcribed Image Text:Left and Right are partners. Their capital accounts during 2020 were as follows:
Left, Capital
8/23 P6,000 1/1
4/3
10/31
Right, Capital
3/5 P9,000 1/1
P30,000
P50,000
8,000
7/6
| 10/7
7,000
5,000
6,000
Partnership net income is P50,000 for the year. The partnership agreement provides for the
division of net income as follows:
Each partner is credited 10 percent interest on his or her average capital.
Because of prior work experience, left is entitled to an anmal salary of P12,000 an Right
is credited with P8,000.
• Any remainder income or loss is to be allocated based on beginning capital.
How much of the partnership net income for 2020 should be assigned to Left and Right?
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