The income summary account has a debit balance of P45,000. The agreement between Emo and Ted include the following terms: • Interest on average capital at 8%; • Salaries of P25,000 and P35,000 are given to Emo and Ted, respectively; Bonus to Ted at 25% of net income after deducting interest and salaries but before deducting the bonus; and Balance is to be divided equally.

The income summary account has a debit balance of P45,000. The agreement between Emo and Ted include the following terms: • Interest on average capital at 8%; • Salaries of P25,000 and P35,000 are given to Emo and Ted, respectively; Bonus to Ted at 25% of net income after deducting interest and salaries but before deducting the bonus; and Balance is to be divided equally.

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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