Rules for the Distribution of Profits or LossesNAME:SCORE:SECTION:PROFESSOR:Problem #9In January 2018, Nick Marasigan and Dems Asacta agreed to produce and sell chocolatecandies. Marasigan contributed P2,400,000 in cash to the business. Asacta contributedthe building and equipment, valued at P2,200,000 and P1,400,000, respectively. Thepartnership had profits of P840,000 during 2018 but was less successful during 2019,when profit was only P400,000.Required:1. Prepare the journal entry to record the investment of both partners in thepartnership.2. Determine the share of profit for each partner in 2018 and 2019 under each of thefollowing conditions:a. The partners agreed to share profit equally.b. The partners failed to agree on a profit-sharing arrangement.C. The partners agreed to share profit according to the ratio of their originalinvestments.d. The partners agreed to share profits by allowing interest of 10% on theiroriginal investments and dividing the remainder equally.e. The partners agreed to share profits by allowing salaries of P400,000 forMarasigan and P280,000 for Aşacta, and dividing the remainder equally.f. The partners agreed to share profits by paying salaries of P400,000 toMarasigan and P280,000 to Asacta, allowing interest of 9% on their originalinvestments, and dividing the remainder equally.

Partnership firm is formed with two partners. This organization would be beneficial to all partners…

Rules for the Distribution of Profits or Losses In January 2018, Nick Marasigan and Dems Asacta agreed to produce candies. Marasigan contributed P2,400,000 in cash to the business. the building and equipment, valued at P2,200,000 and P1,400,000 partnership had profits of P840,000 during 2018 but was less succe when profit was only P400,000.

Rules for the Distribution of Profits or Losses In January 2018, Nick Marasigan and Dems Asacta agreed to produce candies. Marasigan contributed P2,400,000 in cash to the business. the building and equipment, valued at P2,200,000 and P1,400,000 partnership had profits of P840,000 during 2018 but was less succe when profit was only P400,000.

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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