Year 2019 Ann Dox
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Practice Exercise 6-3: (Profit or Loss Distribution - No agreement, Equally, Arbitrary Ratio)
Ann and Dox contributed P150,000 and P300,000 cash, respectively, to put up the capital for a
cell phone loading business. The business had normal first year problems, but during the
second year the operation was very successful. The company reported the following key
operating performance figures for 2019 and 2020 of operations:
Year 2019
Operating revenues
Operating expenses
Year 2020
P320,000
380,000
P980,000
820,000
Instruction: Determine how the partners would share the income or loss for each year under
each of the following assumptions:
a. Ann and Dox failed to include stated ratios in the partnership agreement.
Year 2019
Ann
Dox
Property of and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmitting in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 22
Year 2020
Ann
Dox
b. The partners agreed to share income or losses equally.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
c. The partners agreed to share in the ratio of 3:5 for Ann and Dox, respectively
Year 2019
Ann
Dox
Property of and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmitting in any fom or by any
means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 23
23 / 32
Year 2020
Ann
d. The partners agreed to share in the ratio of 1/3 and 1/6 for Ann and Dox, respectively.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
e. The partners agreed to share income and losses through 40% and 50% to Ann and Dox,
respectively.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
24 / 32
...
•..
•..](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc90aaed-4a62-499b-9854-846dfa06ceb9%2Fa5f13d2f-0ad2-4e90-a7ec-132194375038%2Ffowjsdl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Practice Exercise 6-3: (Profit or Loss Distribution - No agreement, Equally, Arbitrary Ratio)
Ann and Dox contributed P150,000 and P300,000 cash, respectively, to put up the capital for a
cell phone loading business. The business had normal first year problems, but during the
second year the operation was very successful. The company reported the following key
operating performance figures for 2019 and 2020 of operations:
Year 2019
Operating revenues
Operating expenses
Year 2020
P320,000
380,000
P980,000
820,000
Instruction: Determine how the partners would share the income or loss for each year under
each of the following assumptions:
a. Ann and Dox failed to include stated ratios in the partnership agreement.
Year 2019
Ann
Dox
Property of and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmitting in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 22
Year 2020
Ann
Dox
b. The partners agreed to share income or losses equally.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
c. The partners agreed to share in the ratio of 3:5 for Ann and Dox, respectively
Year 2019
Ann
Dox
Property of and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmitting in any fom or by any
means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 23
23 / 32
Year 2020
Ann
d. The partners agreed to share in the ratio of 1/3 and 1/6 for Ann and Dox, respectively.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
e. The partners agreed to share income and losses through 40% and 50% to Ann and Dox,
respectively.
Year 2019
Ann
Dox
Year 2020
Ann
Dox
24 / 32
...
•..
•..
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