Answered: LEM 12. X, Y and Z are partners with…

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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PROBLEM 12. X, Y and Z are partners with average capital balances during 2020 of P120,000, P60,000 and P40,000 respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P30,000 to X and P20,000 to Y, the residual profit or loss is divided equally. In 2020, the partnership sustained a net loss of P33,000 before interest and salaries to partners.

24) By what amount should X’s capital account change?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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