Partners Ayan and Bry share profits and losses of their partnership equally after annual salary allowances of P20,000 for Ayan and P30,000 for Bry and 10% interest is provided on average capital balances; bonus of 10% to Ayan. During 2021, the partnership had losses of P50,000; Ayan's average capital balances was P50,000 and partner Bry’s average capital balance was P40,000. How should the P50,000 losses be divided? a. Ayan 0; Bry 0 b. Ayan (P25,000); Bry (P25,000) c. Ayan (P27,000); Bry (P23,000) d. Ayan (P29,500); Bry (P20,500) *Please provide explanations. Thanks!
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.
Partners Ayan and Bry share
a. Ayan 0; Bry 0
b. Ayan (P25,000); Bry (P25,000)
c. Ayan (P27,000); Bry (P23,000)
d. Ayan (P29,500); Bry (P20,500)
*Please provide explanations. Thanks!
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