Powell is the managing partner of Power Partnership. He is given an incentive of 5% bonus on profit. The profit of the partnership id P400,000 and income tax rate is 30%. Instruction: Determine the amount of bonus under each of the following assumptions: 1. Bonus is computed based on profit before deduction for bonus and income tax. 2. Bonus is computed based on profit after deduction for bonus but before deduction for income tax. 3. Bonus is computed based on profit before deduction for bonus but after deduction for income tax. 4. Bonus is computed based on profit after deduction for both bonus and income tax.

Powell is the managing partner of Power Partnership. He is given an incentive of 5% bonus on profit. The profit of the partnership id P400,000 and income tax rate is 30%. Instruction: Determine the amount of bonus under each of the following assumptions: 1. Bonus is computed based on profit before deduction for bonus and income tax. 2. Bonus is computed based on profit after deduction for bonus but before deduction for income tax. 3. Bonus is computed based on profit before deduction for bonus but after deduction for income tax. 4. Bonus is computed based on profit after deduction for both bonus and income tax.

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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Pan and Sit share profits in the ration of 3:2. However, Pan is to receive a bonus of 20% of the profits, in addition to her profit share. The partnership made a profit for the year of P24,000 before the bonus. Assuming Pan's bonus is computed in profit after deducting said bonus, how much profit share will Sit receive?
! Required information [The following information applies to the questions displayed below.] The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $18,700, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 85,000 6,350 (33,500) (16,800) (12,100) (5,000) 5,000 (5,100) Note: Negative amounts should be indicated by a minus sign. c. What do you believe Gary's share of self-employment income (loss) to be reported on his year 1 Schedule K-1 should be, assuming G&P is an LLC and Gary spends 2,000 hours per year working there full time? Self-employment income (loss)
A and B are partners sharing Profit and Loss in the ratio of 3:2. The Profit for the year was RO 25000. The commission was paid to partners @ 10%. Calculate Commission before charging. Calculate Commission after charging.
Mary is a 25% partner. She is to receive 25% of the partnership income, but no less than $10,000. If the net income of the partnership is %50,000, what amount can the partnership deduct as a guaranteed payment to Mary? (a) $0, (b) $2,500, (c) $10,000, (d) $12,500
The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $14,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: If an amount is zero, enter "0". For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) A. $40,000 Chase Chloe Total Salaries $4 Remaining income allocation Total division of income B. $12,000 Chase Chloe Total Salaries Remaining income allocation Total division of income C. S(10,000) Chase Chloe Total Salaries Remaining income allocation Total division of income %24 %24 %24 %24 %24 %24 %24 %24
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Price, Waterhouse, and Coopers complete their first year of business as a partnership. The partners offer auditing, tax, and advisory services. Use the Tableau Dashboard to determine allocation of income. Select Industry → _A__B_ __C_ Owner Initial Investments Waterhouse Price $250,0... $225,0... $200,0... $175,0... $150,0... $125,0... $100,0... $75,000 $50,000 $25,000 revenue Revenues 带+ableau Coopers Advisory services Auditing revenue Tax services revenu Owner Withdrawals Price Waterhouse Coopers $0 $1,000 $2,000 $3,000 $4,000 Expenses Salaries expense Advertising expense Insurance expense Rent expense Supplies expense ņ 回 1. For Industry C, compute the partnership's net income. 2. For Industry C, determine each partner's share of income assuming the partners did not agree on a plan and therefore share income equally.
For Industry H, determine each partner's share of income assuming the partners agree to share income by giving a $67,700 per year salary allowance to Price, a $126,100 per year salary allowance to Waterhouse, a $113,700 per year salary allowance to Coopers, a 15% interest on their initial capital investments, and the remaining balance shared equally. (Enter all allowances as positive values. Enter losses as negative values.) Important! Be sure to click the correct Industry at the top of the dashboard. Net income (loss) Salary allowances Balance of income (loss) Interest allowances Balance of income (loss) Balance allocated equally Balance of income (loss) Shares of each partner Initial partnership investments Net income Allocation of Partnership Income Price Total net income Total 0 Waterhouse $ $ PRICE, WATERHOUSE, AND COOPERS Statement of Partners' Equity For Year Ended December 31 Price Coopers 0 0 Waterhouse 0 0 0 $ For Industry H, prepare a statement of partners' equity for the…
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Sophia and Anna are partners operating a chain of retail stores. The partnership agreement provides for the following: · Annual salaries to Sophia of P40,000 and P30,000 to Anna. · 12% interest on average capital balances. · Bonus to Sophia of 20% of net income before salaries and bonus but after interest on capital. · Residual income in the ratio 25% to Sophia and 75% to Anna. The Income Summary account for year 2018 shows a credit balance of P244,000 before any allocations. Average capital balances for Sophia and Anna are P100,000 and P150,000, respectively. How much must be the share of Sophia on the partnership net income?