or each of the following independent profit and loss agreement, prepare the profit distribution schedule: Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to Villanueva. Labasan receives a bonus of 5% profit after bonus. Interest is 10% of ending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a 3:3:4 ratio. Profit was P789,600. Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800 Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400
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.
Distribution of Profits or Losses Based on Partner’s Agreement
Labasan, Gabayan, and Villanueva are manufacturer’s representatives in the architecture business. Their capital accounts were as follows:
Labasan, Capital Gabayan, Capital Villanueva,Capital
9/1 80,000 1/1 300,000 3/1 90,000 1/1 400,000 8/1 120,000 1/1 500,000
5/1 60,000 7/1 50,000 4/1 70,000
9/1 40,000 6/1 30,000
Required:
For each of the following independent
- Salaries are P150,000 to Labasan, P200,000 to Gabayan, and P180,000 to Villanueva. Labasan receives a bonus of 5% profit after bonus. Interest is 10% of ending capital balances. Labasan, Gabayan, and Villanueva divide any remainder in a 3:3:4 ratio. Profit was P789,600.
- Interest is 10% of average capital balances. Salaries are P240,000 to Labasan, P210,000 to Gabayan, and P250,000 to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided equally. Profit was P680,800
- Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210,000 to Labasan, P180,000 to Gabayan, and P150,000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929,400
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