Problem #6Distribution of Profits or Losses Based on Partners’ AgreementOrosco and Castillo divide partnership profits and losses solely on the basis of their average capital balances. Orosco had P450,000 invested during all of 2018; Castillo had P300,000 invested from January 1 to September 30, and he invested another P200,000 on October 1. If profit was P2,000,000 during 2018, how much should each partner receive?
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.
Problem #6Distribution of
AgreementOrosco and Castillo divide partnership profits and losses solely on the basis of their average capital balances. Orosco had P450,000 invested during all of 2018; Castillo had P300,000 invested from January 1 to September 30, and he invested another P200,000 on October 1. If profit was P2,000,000 during 2018, how much should each partner receive?
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