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, inclusive of salary, interest and share in remaining profit, and C shall also receive his guaranteed minimum share
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, inclusive of salary, interest and share in remaining profit, and C shall also receive his guaranteed minimum share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The
• 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, inclusive
of salary, interest and share in remaining profit, and C shall also receive his guaranteed minimum share?
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