Lester and Stephen formed a partnership with capital contributions of P300,000 and P700,000, respectively. During its first year of operations, the partnership earned a profit of P200,000. Prepare a schedule showing the division of profit between the partners under each of the following independent assumptions: 1. Profit is divided equally. 2. There is no profit or loss sharing agreement. 3. A monthly salary of P8,000 will be given to Lester and the balance divided in the ratio of their capital balances. 4. A monthly salary of P8,000 will be given to Lester, 6% interest will be allowed on the capital balances of each partner; and the balance divided equally.

Lester and Stephen formed a partnership with capital contributions of P300,000 and P700,000, respectively. During its first year of operations, the partnership earned a profit of P200,000. Prepare a schedule showing the division of profit between the partners under each of the following independent assumptions: 1. Profit is divided equally. 2. There is no profit or loss sharing agreement. 3. A monthly salary of P8,000 will be given to Lester and the balance divided in the ratio of their capital balances. 4. A monthly salary of P8,000 will be given to Lester, 6% interest will be allowed on the capital balances of each partner; and the balance divided equally.

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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