M, N, and 0 formed a partnership on January 1, 200A with 3.7 investments of P 40,000, P 24,000 and P 20,000, respectively. The partners agreed to the following distribution of profits: Annual salaries allowed: М, Р 4,800; N, P 6,000; 0, P 6,000 5% interest on the beginning capital. M, the managing partner is allowed a bonus of 20% of the net profit after treating as expenses the partners' salaries, interest, and bonus. Profits after the allowances are to be divided 3:3:4, for M, N, and O, respectively. For the year 200A, the net profit before interest, salaries, and bonus amounted to P 29,400. Cash withdrawals made were M, P 10,200; N, P 12,000; and O, P 10,600. REQUIRED: Prepare a Statement of Partners' Equity for the year ended December 31, 200A.

M, N, and 0 formed a partnership on January 1, 200A with 3.7 investments of P 40,000, P 24,000 and P 20,000, respectively. The partners agreed to the following distribution of profits: Annual salaries allowed: М, Р 4,800; N, P 6,000; 0, P 6,000 5% interest on the beginning capital. M, the managing partner is allowed a bonus of 20% of the net profit after treating as expenses the partners' salaries, interest, and bonus. Profits after the allowances are to be divided 3:3:4, for M, N, and O, respectively. For the year 200A, the net profit before interest, salaries, and bonus amounted to P 29,400. Cash withdrawals made were M, P 10,200; N, P 12,000; and O, P 10,600. REQUIRED: Prepare a Statement of Partners' Equity for the year ended December 31, 200A.

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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LL, MM and PP are partners with capitals of P40,000; P25,000 and P15,000 respectively. Thepartnership agreement provides that each partner shall be allowed 5% interest on his capital, that LLshall be allowed an annual salary of P8,500, and that MM shall be entitled to a minimum of P14,000per annum including amounts allowed as interest on capital and as share of profit. Profit after interestand salary allowances is to be divided between LL, MM and PP as 5:3:2 respectively. What amountmust be earned by the partnership during 2021 before charges for interest or salary if LL is to receivean aggregate of P20,000 to include interest, salary, and share of profit? a. P38,000b. P50,000c. P38,550d. P35,880
A, B and C share profits and losses in the ratio of 3:2:1. C is to receive a salary of K30, 000 as managing partner, and interest at the rate of 15% p. a is to be charged on drawings. Further, Interest to be earned by partners on their capital contributed. The following are the results of the profits and losses appropriated for the current year. Net profit K200, 0000 Salary K30, 000 Interest on drawings A K10, 000 B K8, 000 C K7, 000 Interests on capital A K20, 000 B K15, 000 C K15, 000 You are required to calculated the partners share of taxable income for tax purposes.
Se and Xy are partners agreeing to allow monthly salaries of P6,000 and P5,000, respectively; 6% interest on the capital investment at the beginning of the year of P300,000 and P230,000, respectively; and the balance equally. The first year registered a profit P100,000. How much should be the share of each partner in the Company's profit?
The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute and explain for the respective shares of the partners on the partnership profit.
The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute for the respective shares of the partners on the partnership profit.
The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.
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HRM Partnership begins its first year of operations with the following capital balances A, capital P32,000 C, capital 16,000 According to the partnership agreement, all profits will be distributed as follows • A monthly salary of P 3,200 and P 1,600 to A & C respectively. • The partners will be allowed with interest equal to 10% of the capital balances of the first day of the year. A bonus of 10% of the net income after bonus to A. • The remainder will be divided on the basis of the beginning capital for the first year and equally for the second year Each partner is allowed to withdraw up to P 1,600 a year. Assume that the net loss for the first year of operations ions is P2,400 with net income of P 8,800 in the following year. Assume further that each partner withdraws the maximum amount from the business each period. The capital balances of A at the end of the second year is The capital balances of B at the end of the second year is
and B formed a partnership. The partnership agreement stipulates the following:
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