The following are the transactions of a joint operation formed by A, B and C during a year: > A contributed cash of P400 and merchandise costing P800. B contributed merchandise costing P1,600. Freight-in paid by B is P80. C made purchases amounting to P400 using the cash contributed by A. C paid expenses of P800 using its own cash. C made total sales of P3,200. All the merchandise was sold except one-half of those contributed by B. > Cis appointed as the manager of the joint operation. As compensation, C is entitled to a P120 salary plus bonus of 25% on profit after salary and bonus. > Interest of 10% per annum is allowed to A and B's capital contributions. > Cis charged for the cost of any unsold inventory. Profit or loss after necessary adjustments shall be divided equally. How much is the profit or loss after salaries but before bonus of the joint operation?
The following are the transactions of a joint operation formed by A, B and C during a year: > A contributed cash of P400 and merchandise costing P800. B contributed merchandise costing P1,600. Freight-in paid by B is P80. C made purchases amounting to P400 using the cash contributed by A. C paid expenses of P800 using its own cash. C made total sales of P3,200. All the merchandise was sold except one-half of those contributed by B. > Cis appointed as the manager of the joint operation. As compensation, C is entitled to a P120 salary plus bonus of 25% on profit after salary and bonus. > Interest of 10% per annum is allowed to A and B's capital contributions. > Cis charged for the cost of any unsold inventory. Profit or loss after necessary adjustments shall be divided equally. How much is the profit or loss after salaries but before bonus of the joint operation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Show the solution in good accounting form
Transcribed Image Text:The following are the transactions of a joint operation formed by A, B and C during a year:
A contributed cash of P400 and merchandise costing P800.
> B contributed merchandise costing P1,600. Freight-in paid by B is P80.
> C made purchases amounting to P400 using the cash contributed by A.
> C paid expenses of P800 using its own cash.
C made total sales of P3,200. All the merchandise was sold except one-half of those
contributed by B.
Cis appointed as the manager of the joint operation. As compensation, C is entitled to a
P120 salary plus bonus of 25% on profit after salary and bonus.
> Interest of 10% per annum is allowed to A and B's capital contributions.
Cis charged for the cost of any unsold inventory. Profit or loss after necessary adjustments
shall be divided equally.
How much is the profit or loss after salaries but before bonus of the joint operation?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education