Assume that Adam and Eve agreed to the following: 1. Each of them would have a salary of P5,000 per quarter (one-year operation) 2.6% interest on their respective average capital. Adam - P87,500, Eve -P52,500 3. 10% bonus of net income before salaries, interest on capital and before the bonus to Adam, the managing partner. 4. The balance of net income shall be divided on the basis of 60% and 40%, respectively. 5. Net income for the year is P50,000 9. How much is the share in net income for Adam? O a. P29,790 O b. P20,210 P28210
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- 2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. DA bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the…Se and Xy are partners agreeing to allow monthly salaries of P6,000 and P5,000, respectively; 6% interest on the capital investment at the beginning of the year of P300,000 and P230,000, respectively; and the balance equally. The first year registered a profit P100,000. How much should be the share of each partner in the Company's profit?The partnership agreement of X, Y, and Z stipulates the following:a. Partners Y and Z shall receive annual salaries of P23,000 and P12,000, respectively.b. A bonus of 15% of profit after salaries but before deduction of bonus shall be given to Partner X, themanaging partner.c. Each partner shall receive 11% interest on average capital investments.d. Any remaining profit or loss shall be shared as follows: 30% to X, and 35% each to Y and Z.The average capital investments of the partners during the year are as follows: X – P125,000; Y – P78,000;and Z – P101,000.Case # 1: The partnership earns profit of P125,000.Case # 2: The partnership earns profit of P9,000.Case # 3: The partnership incurs a loss of P19,000.For items 1-3, refer to Case #11. How much is X's share in the profit/loss?a. P 40,168b. P 40,169c. P 60,170d. P 60,1712. How much is Y's share in the profit/loss?a. P 46,652b. P 46,651c. P 56,653d. P 56,6543. How much is Z's share in the profit/loss?a. P 38,182b. P 38,181c. P…
- 29. The net income of ABC partnership for the year is P100,000. Partner A is to be given a salary of 5,000 per month. The capital balances of A, B and C are P 150,000, P 160,000, and P 140,000, respectively. Interest in the capital balance will be given at a rate of 15%. Bonus of 10% after salaries and interest is given to partner C. Remaining profit is to be distributed equally to the partners. How much is C's share in the income? c. P 10,000 а. Р 11,833 b. P 14,833 d. P 13,000 O A О вThe partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute and explain for the respective shares of the partners on the partnership profit.The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of 12,000 and ₱ 8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. (Deduct the salaries to the profit, as basis for computation) Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A ₱100,000 B 60,000 C 120,000 The partnership earns profit of ₱100,000. Requirement: Compute for the respective shares of the partners on the partnership profit.
- Partners A and C shall receive annual salaries of B12,000 and B8,000, respectively. A bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. Any remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: A B100,000 60,000 120,000 Assiuming that the partnershin earnec a profit amounting to P10 000 1 point15. Ravelo and Febrero are partners agreeing to allow monthly salaries of P6,000 and P5,000, respectively; 6% interest on the capital investment at the beginning of the year of P300,000 and P230,000, respectively; and the balance equally. The first year registered a profit of P100,000. The partners' share should be a. Ravelo, P58,100; Febrero, P41,900. b. Ravelo, P56,600; Febrero, P43,400. C. Ravelo, P54,500; Febrero, P45,500. d. Ravelo, P50,000; Febrero, P50,000. С.Sohail, Ali and Aryan are partners with fixed capitals of Rs. 160,000, Rs. 180,000 and Rs. 260,000 respectively. The partner agreement provides as under: Commission paid to Sohail Rs. 4000 per month. Salary is allowed to Ali Rs. 7000 quarterly. Interest on beginning partners is to be charged @ 14% per annum. Quarterly Bonus allowed to Aryan Rs. 4,000 Remaining profit to be distributed by 2:4:6. The income statement for the year ended December 31, 2010 showed a net profit of Rs. 550,000. Prepare the income statement distribution summary with working, and also record the necessary journal entries
- In addition, the partners are paid annual salaries of P600,000 and P400,000 to Benedict and Lord each respectively. The partners also withdraw P100,00 every quarter. Assuming that the partners’ return on invested capital is 20% per annum, given on average capital for the year and the balance of profits is allocated equally, the allocation of profits should be?The partnership agreement of X, Y, and Z stipulates the following: Partners Y and Z shall receive annual salaries of P23,000 and P12,000, A bonus of 15% of profit after salaries but before deduction of bonus shall be given to Partner X, the managing Each partner shall receive 11% interest on average capital Any remaining profit or loss shall be shared as follows: 30% to X, and 35% each to Y and The average capital investments of the partners during the year are as follows: X – P125,000; Y – P78,000; and Z – P101,000. Case # 3: The partnership incurs a loss of P19,000. 1. How much is X's share in the profit/loss? a. (P 12,482) c. (P7,494) b. P 976 d. (P 19,000) 2. How much is Y's share in the profit/loss? a. (P 12,482) b. P 976 c. (P7,494) (P 19,000) 3. How much is Z's share in the profit/loss? a. (P 12,482) c. (P7,494) b. P 976 d. (P 19,000)2. Rene, Michael, and Kevin are partners in an accounting firm. Their capital accountbalance at year-end were Rene, P90,000; Michael, P120,000; and Kevin,P160,000. They share profit and losses on a 4:4:2 ratio after considering thefollowing terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner’s capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevinrespectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following:A. Profit or Loss Distribution TableB. Corresponding JOURNAL ENTRY to distribute profit or loss