Answered: What is the share of partner B in the…

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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A, B, and C are partners sharing profit on a 7:2:1 ratio. On January 1, 2005, D was admitted into the partnership with 15% share in profits. The old partners continue to participate in profits in their original ratios.

For the year 2005, the partnership showed a profit of P15,000. However, it was discovered that the following items were omitted in the firm’s book:

	2004	2005
Accrued expense		PHP1050
Accrued income		PHP875
Prepaid expenses	PHP1400
Unearned income	PHP1225

What is the share of partner B in the 2005 net profit?

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