Problem 5: Jeff and Nhar formed a partnership on Sept. 29, 2017 with original capital contribution of P400,000 and P600,000, respectively. On June 01, 2018, Jeff invested additional capital of P100,000, while Nhar's made a permanent withdrawal of P100,000 on October 30, 2018. On July 01, 2019, Jeff made again an additional investment of P100,000, and on the same day Nhar made a permanent withdrawal of P100,000. The partners agreed that interest of 8% will be given to each partner based on their initial contribution to the partnership. Required: Distribute the profit of P60,000 in consideration of the agreed interest, and the remainder to be distributed at the Profit and Loss ratio of 2: 3. 1. How much interest to be given to: a. Jeff: b. Nhar: 2. How would the P60,000 profit will be distributed? a. Share of Jeff on the profit: b. Share of Nhar on the profit:
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.
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