X and Y formed a partnership on January 1, 2020. X contributed net assets of P500,000 and Y no capital contribution because she will manage the firm on a full time basis. Their partnership agreement to distribute profit were as follows: a) Interest at 5% shall be allowed on the beginning capital. b) Y is to be paid salaries of P10,000 per month. c) Y is to received a bonus of 30% of profit before deducting interest and salaries. d) Profits are to be divided between X and Y in the ratio of 6:4 There are no withdrawals by either partner during the year. The partnership statement of income contains the following information. Revenues P1,520,000 Expenses (including salary and interest) 820.000 Profit P 700,000 How much is the equity of X at year-end?

X and Y formed a partnership on January 1, 2020. X contributed net assets of P500,000 and Y no capital contribution because she will manage the firm on a full time basis. Their partnership agreement to distribute profit were as follows: a) Interest at 5% shall be allowed on the beginning capital. b) Y is to be paid salaries of P10,000 per month. c) Y is to received a bonus of 30% of profit before deducting interest and salaries. d) Profits are to be divided between X and Y in the ratio of 6:4 There are no withdrawals by either partner during the year. The partnership statement of income contains the following information. Revenues P1,520,000 Expenses (including salary and interest) 820.000 Profit P 700,000 How much is the equity of X at year-end?

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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