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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

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.

 

  1. Partnership Net Income 50,000
  2. Partnership Net Loss 20,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Partnership Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education