Answered: What should be done regarding this…

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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Question

The partnership obtained a profit for the period. Salaries were distributed, and so are the interests on beginning capital balances. The next step to be done is to provide bonus to one of the partners. After calculating the bonus and had it given to the partner, the net income became insufficient. What should be done regarding this matter?

a. Continue to provide the bonus and the insufficiency should be divided among the partners.

b. The bonus should not be given anymore, and the remaining balance to be divided among the partners.

c. The whole amount of profit should be divided among the partners equally.

d. None of the given.

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