The partnership agreement of EE, KK, and VV provides for the year-end allocation of net income in the following order: First, EE is to receive 10 percent of net income up to P100,000 and 20 percent over P100,000. Second, KK and VV each are to receive 5 percent of the remaining income over P150,000. The balance of income is to be allocated equally among the three partners. The partnership’s 2005 net income was P250,000 before any allocations to partners. What amount should be allocated to EE?
The partnership agreement of EE, KK, and VV provides for the year-end allocation of net income in the following order: First, EE is to receive 10 percent of net income up to P100,000 and 20 percent over P100,000. Second, KK and VV each are to receive 5 percent of the remaining income over P150,000. The balance of income is to be allocated equally among the three partners. The partnership’s 2005 net income was P250,000 before any allocations to partners. What amount should be allocated to EE?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The partnership agreement of EE, KK, and VV provides for the year-end allocation of net income in the following order:
First, EE is to receive 10 percent of net income up to P100,000 and 20 percent over P100,000.
Second, KK and VV each are to receive 5 percent of the remaining income over P150,000.
The balance of income is to be allocated equally among the three partners. The partnership’s 2005 net income was P250,000 before any allocations to partners. What amount should be allocated to EE?
I only need the solution, the correct answer is 108,000.
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