Problem 1: Interest on capital and bonus A and B formed a partnership. The partnership agreement stipulate the following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?
Problem 1: Interest on capital and bonus A and B formed a partnership. The partnership agreement stipulate the following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Problem 1:
Interest on capital and bonus A and B formed a partnership. The partnership agreement stipulate the
following:
a. Monthly salary of P5,000 for A.
b. 20% bonus to A, before deductions for salary, interest, and bonus.
c. 10% interest in the weighted average capital of B.
d. Salary, bonus and interest are considered partnership expenses.
The result of operations show the following:
Revenues P150,000
Expenses (including salary, interest and bonus) (120,000)
Profit P30,000
The weighted average capital balance of B's capital account is P100,000
Required: How much is the bonus of A?
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