The partnership agreement of partners A, B and C stipulates the following:A shall receive a salary of P40,000.Interest of 10% shall be computed on the partners' capital contributions of P40,000, P100,000 andP200,000.• Balance is divided among the partners on a 2:3:5 ratio. However, C is guaranteed a minimumshare of P40,000, inclusive of interest, if the partnership earns profit.How much is the minimum level of profit necessary so that A shall receive a total of P50,000,inclusive of salary, interest and share in remaining profit, and C shall also receive his guaranteedminimum share?

When two or more than two persons agree to share profits and losses as per agreed terms and to carry…

Answered: The partnership agreement of partners…

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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On January 1, 2020, X and Y have capital balances of P 50.000 and P 100.000. Partner X made monthly withdrawals of P 1,000 while Y made monthly withdrawals of P 1.500. Partners profit and loss agreement were as follows: 1. Annual salaries of P 60.000 for X and P 40.000 for Y 2. 10% interest on beginning capital 3. Remainder are shared equally. If the partnership capital at the end of the year is P225,000, the partnership profit (loss) for the year amounted to Place a parenthesis if net loss.
The A and B partnership agreement provides for A to receive a 20% bonus on profits before the bonus. Remaining profits and losses are divided between A and B in the ratio of 2:3, respectively. Which partner has a greater advantage when the partnership has a profit or when it has a loss? Loss Profit a. A b. A BA A Profit C. B d. B Loss B A
P, L, and O are partners with capital balances of $50,000, $30,000 and $20,000 and who share in the profit and loss of the PLO partnership 30%, 20%, and 50%, respectively, when they agree to admit C for a 20% interest. C contributes $38,000 to the partnership and the bonus method is used. What amount will be credited for C’s beginning capital balance?
A and B have partner capital balances, at book value, of $50,000 and $70,000. A is allocated 60% of profits or losses, and B is allocated the balance. The partners believe that an asset (land) has a market value in excess of book value in the amount of $30,000. They are considering admitting C to the partnership in exchange for total consideration of $80,000 cash. C will receive 40% interest in capital and 35% interest in profits and losses. Under the goodwill method, how much of goodwill should be recognized? a. 0 b. 30,000 c. 50,000 d. 120,000
The partnership agreement of Angela and Dawn has the following provisions: The partners are to earn 10 percent on the average capital. Angela and Dawn are to earn salaries of $26,000 and $18,000, respectively. Any remaining income or loss is to be divided between Angela and Dawn using a 70:30 ratio. Angela’s average capital is $66,000 and Dawn’s is $52,000. Required: Prepare an income distribution schedule assuming the income of the partnership is (a) $90,000 and (b) $33,000. If no partnership agreement exists, what does the UPA 1997 prescribe as the profit or loss distribution percentages? Note: Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.
-X, Y, and Z formed a partnership on Jnauary 1, 2021, and contributed P150,00; P200,000; P300,000, respectively. Their articles of co-partnership provide that the operating income be shared among partners as follows: as salary, P24,000 for X; P18,000 for Y; and P12,000 for Z; interest of 12% on the average capital during 2021 of the three partners; and the remainder in the ratio of 4:2:4, respectively. The operating income for the year-end December 31, 2021 amounted to P200,000. X contributed additional capital of P30,000 on July 1, and made a drawing of P10,000 on October 1; Y contributed additional capital of P20,000 on August 1, and made a drawing of P10,000 on October 1; and Z made a drawing of P30,000 on November 1, 2021. How much is the average capital of partner X? *
What is the correct answer?
Calibo and Camos are partners with capital balances of P30,000 and P40,000 and sharing profits and losses 40% and 60% respectively. If Cueva is admitted as partner paying P20,000 in exchange for 50% of Calibo's equity, the entry in the partnership books should be as follows:
A, B and C are partners of Push-it Partnership. Their capital balances are A- P400, B - P280 and C - P120. The following are their agreement in their profit sharing: 25% bonus to A based on profit after deducting the said bonus. B and C will be given 10% interest each on their capital balances. The remaining profits will be shared in the ratio of 5:2:1 for A, B and C respectively. How much is the profit share of A if the profit is P90? How much will be the income (loss) if the share ofA is P255? How much will be the income (loss) if the share of B is P21? How much will be the income (loss) if the share of C is P3?
The ABC Partnership has assets with book value of P240,000 and a market value of P195,000, outside liabilities of P70,000, loans payable to Partner Abe of P20,000,and capital balances for Partners Abe, Baker, and Chapman of P70,000, P30,000 andP50,000, respectively. The partners share profits and losses equally. How would the first P100,000 of available assets be distributed?
X and Y are partners and have beginning capital balances of P 360,000 and P 600,000 respectively. Partnership profits and losses are allocated as follows salaries of P 160,000 and P 200,000 to X and Y, respectively, 10% interest on their beginning capital balances, any remaining profit is divided equally Partnership profit of P 600,000 is allocated as follows: A. X =P 300,000,V-P 300,000 B. X =P.280,000,Y-P320,000 C. X =P 2600. V - P * 332000 D. X = P * 192000Y = P * 40B, 0
In a partnership firm there are two partners – X and Y. They share profit in the ratio of 55% and 45%. X contributed capital of OMR 180,000 and Y contributed OMR 160,000. Partnership Agreement says partners are eligible to get interest on capital at 10%. Income Statement of a Partnership firm shows the net profit of OMR 200,000. How much profit X and Y will receive from the partnership?

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