On January 1, 2018, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,000,000 and P400,000. A is appointed as managing partner. Read the data below. What is A's share in partnership profit for 2018?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2018, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,000,000 and P400,000. A is appointed as managing partner. Read the data below. What is A's share in partnership profit for 2018?

During 2018, A, B and C made additional investments of P1,000,000, P400,000, and P600,000,
respectively. At the end of 2018, A, B and C made drawings of P400,000, P200,000 and P800,000
respectively. At the end of 2018, the partnership had a credit balance in the income summary account
of P2,100,000. The profit or loss agreement of the partners is as follows:
10% interest on original capital contribution of the partners
• Quarterly salary of P80,000 and P20,000 for A and B, respectively
Bonus to A equivalent to 20% Net Income after interest and salary to all partners
Remainder is to be distributed equally among the partners.
Transcribed Image Text:During 2018, A, B and C made additional investments of P1,000,000, P400,000, and P600,000, respectively. At the end of 2018, A, B and C made drawings of P400,000, P200,000 and P800,000 respectively. At the end of 2018, the partnership had a credit balance in the income summary account of P2,100,000. The profit or loss agreement of the partners is as follows: 10% interest on original capital contribution of the partners • Quarterly salary of P80,000 and P20,000 for A and B, respectively Bonus to A equivalent to 20% Net Income after interest and salary to all partners Remainder is to be distributed equally among the partners.
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