ng order: First, Ta is to receive 10% of net income up to P100,000 and 20% over P100,000, Second, Li and No are to receive 5% each of the remaining income over P150,000. The balance of income is to be allocated equally among the three partners. The partnership’s net income was P250,000 before any allocation to partners. What amount should be a
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.
4. The partnership agreement of Ta, Li and No provides for the year-end allocation of net
income in the following order: First, Ta is to receive 10% of net income up to P100,000
and 20% over P100,000, Second, Li and No are to receive 5% each of the remaining
income over P150,000. The balance of income is to be allocated equally among the
three partners. The partnership’s net income was P250,000 before any allocation to
partners. What amount should be allocated to Ta?
Step by step
Solved in 2 steps
