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…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...

See similar textbooks

Similar questions

The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
The partnership agreement of partners A, B and C stipulates the following:• A shall receive a salary of ₱40,000.• Interest of 10% shall be computed on the partners’ capital contributions of ₱40,000, ₱100,000 and₱200,000.• Balance is divided among the partners on a 2:3:5 ratio. However, C is guaranteed a minimum share of₱40,000, inclusive of interest, if the partnership earns profit.3. How much is the minimum level of profit necessary so that A shall receive a total of ₱50,000, inclusiveof salary, interest and share in remaining profit, and C shall also receive his guaranteed minimum share?
The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute and explain for the respective shares of the partners on the partnership profit.
The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute for the respective shares of the partners on the partnership profit.
Partners A and B have a profit and loss agreement with the following provisions: • Salaries of P30,000 and P45,000 for A and B, respectively; The interest of 10% on average capital balances of P50,000 and P65,000 for A and B, respectively. • One-fourth of any remaining profits are allocated to A and the ratio to B. If the partnership had a net income of 250,000, how much profit is allocated to Partner B? ●
Partners Manipon and Naranja have a profit and loss agreement with the following provisions: salaries of P20,000 and P25,000 for Manipon and Naranja, respectively; a bonus to Manipon of 10% of net income after bonus; and interest of 20% on average capital balances of P40,000 and P50,000 for Manipon and Naranja, respectively. Any remainder is split equally. If the partnership had net income of P88,000, how much should be allocated to Partner Manipon? a. P36,000 b. P44,500 C. P50,000 d. P43,500
The profit and loss sharing agreement for the A, B, and C partnership provides that each partner receive a bonus of 3% on the original amount of partnership net income if there is a net income. A and B receive a salary allowance of P10,500 and P15,500, respectively. C has an average capital balance of P300,000, and receives a 10% interest allocation on the amount of his average capital account balance. Residual profits and losses are allocated to A, B, and C in their respective ratios of 1:1:2. Compute the share of the net income for each partner for each of the following partnership net income/losses. Partnership Net Income 50,000 Partnership Net Loss 20,000
A and B agreed that they will receive annual salaries of P60,000 each. Bonus shall be given to A of 20% of the net income after partners' salaries, the bonus being treated as an expense. Balance will be divided equally. The partnership reported a net income of P360,000 after partners' salaries but before bonus. How much is the share of B in the profit?
A and B formed a partnership. The partnership agreement stipulates the following: • Annual salary allowances of P100,000 for A and P70,000 for B. • Bonus to A of 10% of profit after partner's salaries and bonus. The partners share profits and losses on a 50:50 ratio. During the period the partnership incurred loss of P500,000. How much is the share of A in the partnership results of operations during the period? Your answer
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.
A and B formed a partnership. The partnership agreement stipulates the following: Annual salary allowances of P200,000 for A and P120,000 for B. Salary allowances are to be withdrawn by the partners throughout the period and are to be debited to their respective drawings account. The partners share profits equally and losses on a 60:40 ratio. During the period the partnership earned profit of P400,000 before salary allowances. How much is the share of B in the partnership profit?
A and B formed a partnership. The partnership agreement stipulates the following: • Annual salary allowances of P100,000 for A and P70,000 for B. • Bonus to A of 10% of profit after partner's salaries and bonus. The partners share profits and losses on a 50:50 ratio. During the period the partnership incurred loss of P500,000. How much is the share of A in the partnership results of operations during the period?

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS