LL, MM, and PP are partners with capitals of P 40,000, P 25,000, and P 15,000 respectively. The partnership agreement provides that each partner shall be allowed 5 percent on his capital, and that LL shall be allowed an annual salary of P 8,500 and that MM shall be entitled to a minimum of P 14,000 per annum including amounts allowed as interest on capital and as share of profit. Profit after interest and salary allowances is to be divided between LL, MM, and PP 5:3:2 respectively. What amount must be earned by the partnership during 2020 before charges for interest or salary if LL is to receive an aggregate of P 20,000 to include interest, salary, and share of profit? CC, DD, and EE, doctors, agree to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that EE is to be allowed a salary of P 14,000, and that DD is to be guaranteed P 10,500 as his share of the profits. During the first year of operation, income from fees are P 90,000, while expenses total P 48,000. What amount of net income should be credited to each partners’ capital account?
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.
LL, MM, and PP are partners with capitals of P 40,000, P 25,000, and P 15,000 respectively. The
CC, DD, and EE, doctors, agree to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that EE is to be allowed a salary of P 14,000, and that DD is to be guaranteed P 10,500 as his share of the profits. During the first year of operation, income from fees are P 90,000, while expenses total P 48,000. What amount of net income should be credited to each partners’ capital account?
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