Required: Determine the partners' share in the profit under each of the following assumptions: 1. Beginning capital balances. 2. Average capital balances. (Investments and withdrawals are assumed to have been made as of the beginning of the month if made before the middle of the month, and assumed to have been made as of the beginning of the following month if made after the middle of the month.) 3. Ending capital balances.
Required: Determine the partners' share in the profit under each of the following assumptions: 1. Beginning capital balances. 2. Average capital balances. (Investments and withdrawals are assumed to have been made as of the beginning of the month if made before the middle of the month, and assumed to have been made as of the beginning of the following month if made after the middle of the month.) 3. Ending capital balances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunglao and Java are partners in a bakery business. The activity in each partner's capita
Distribution of Profits or Losses Based on Partners' Agreement
NAME:
SECTION:
SCORE:
PROFESSOR:
NAME
Problem #15
SECTI
Proble
Rules
account for 2015 follows:
Alisua
Sunglao, Capital
Java, Capital
300,000
contri
200,000
Dec. 3
Jan. 1
Jan. 1
May 25
80,000
50,000
50,000
50,000
40,000
Feb. 12
Mar. 23
July 10
Sept. 30
Requi
Dec. 10
70,000
Oct. 19
20,000
180,000
Dec. 5
Deter
10,000
300,000
Dec. 30
Dec. 30
230,000
Dec. 31
situat
100,000
Dec. 31
accou
The drawing account is not used. The profit for 2015 is P2,000,000.
1. P
Required:
2. E
Determine the partners' share in the profit under each of the following assumptions:
1. Beginning capital balances.
3. S
2. Average capital balances. (Investments and withdrawals are assumed to have been
made as of the beginning of the month if made before the middle of the month, and
assumed to have been made as of the beginning of the following month if made
after the middle of the month.)
3. Ending capital balances.
4. Bonus to Sunglao equal to 20% of profit in excess of P1,500,000, balance to be
divided equally.
5. Salary allowances of P450,000 and P350,000 to Sunglao and Java, respectively,
interest on average capital balances imputed at 10%; balance to be divided equally.
(Investments and withdrawals are treated as in requirement # 2.)
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