Interest on capital and bonus A and B formed a partnership. The partnership agreement stipul following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?

Interest on capital and bonus A and B formed a partnership. The partnership agreement stipul following: a. Monthly salary of P5,000 for A. b. 20% bonus to A, before deductions for salary, interest, and bonus. c. 10% interest in the weighted average capital of B. d. Salary, bonus and interest are considered partnership expenses. The result of operations show the following: Revenues P150,000 Expenses (including salary, interest and bonus) (120,000) Profit P30,000 The weighted average capital balance of B's capital account is P100,000 Required: How much is the bonus of A?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
4. A and B formed a partnership. The partnership agreement stipulates the following: • Monthly salaries of P6,000 for A and P2,000 for B. • 20% bonus to A, after deductions for salary, interest, and bonus. 10% interest on the weighted average capital of B. Any remaining amount is shared equally. The partnership's records show the following: Revenues Expenses (including salary, interest, and bonus) Profit 150,000 (120,000) 30,000 n this message ose of the indiw ender and may not v reflect the views f Philippine Cultural College Page | 2 The movements in B's capital account are as follows: В. Сарital 60,000 beg. Aug. 1 withdrawal 30,000| 20,000 Mar. 31 additional investment Oct. 1 additional investment Dec. 31 additional investment 40,000 10,000 100,00 end. How much is the share of B in the partnership profit? a. 93,000 b. 52,250 с. 46,250 d. 45,000
1. Partners MM and LL have profit and loss agreement with the following provisions: salaries of P30,000 and P45,000 for MM and LL, respectively; a bonus to MM of 10% net income after salaries and bonus; and interest of 10% on average capital balances of P20,000 and P35,000 for MM and LL, respectively. One-third of any remaining profits will be allocated to MM and the balance to LL. If the partnership had a net income of P104,500, how much should be allocated to MM, assuming the provisions of the profit and loss agreement are ranked by order of priority, starting with salaries?2. Renalie and Ben are partners who share profits and losses in the ratio of 6:4, respectively. On June 1, 20X2, their respective capital accounts were as follows:• Renalie - P60,000 • Ben - P50,000On the same date, Jeremiah was admitted as a partner with 1/5 interest in capital and profits for an investment of P40,000. What is the capital of Ben after Jeremiah’s admission if the partnership began with a total…
Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows: A B C Salary allowance P30,000 P10,000 P40,000Interest on ave. capital balance 10% 10% 10% Remainder 40% 40% 20% The average capital balances for the current year were P50,000 for A, P30,000 for B, and P20,000 FOR c. Assuming a current year net income of P150,000, what amount should be allocated to each partner? Assuming a current year net income of P50,000, what amount should be allocated to each partner?
The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.
The partnership agreement of ABC partnership includes the following profit and loss sharing provisions: Salaries to partners B and C amounting to P5,000 per month 5% bonus to partner B based on profits after salaries and bonus Remainder to be allocated 2:2:1 At the end of current period, the partnership generated a net income of P100,000. Based on the information provided, how should the profit be distributed?
A and B formed a partnership. The partnership agreement stipulates the following: Annual salary allowance of P40,000 for A. • Interest of 10% on the weighted average capital balance of B. The partners share profits and losses in a 80:20 ratio. During the period the partnership earned profit of P100,000. The movements in B's capital account are as follows: B. Capital 60,000 beg. Aug. 1 withdrawal 30,000 20,000 40,000 Mar. 31 additional investment Oct. 1 additional investment Dec. I additional investment 10,000 end. 100,000 How much is the share of A in the partnership profit?
A and B formed a partnership. The partnership agreement stipulates the following: Annual salary allowance of P40,000 for A. ● Interest of 10% on the weighted average capital balance of B. The partners share profits and losses in a 80:20 ratio. ● During the period the partnership earned profit of P100,000. The movements in B's capital account are as follows: B, Capital 60,000 beg. Aug. 1 withdrawal 30,000 20,000 Mar. 31 additional investment Oct. 1 additional investment 40,000 10,000 Dec. 1 additional investment end. 100,000 How much is the share of A in the partnership profit?
Requirement: Compute for the respective shares of the partners in 3. The partnership agreement of A and B stipulates the following: Annual salaries of P100,000 for A and P60,000 for B. 20% bonus to A, based on profit after salaries and bonus. Balance is shared equally. The partnership earned profit of P520,000 before salaries and bonus. Requirement: Compute for the respective shares of the partners in the profit. 4. A and B's partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared equally. During the period, the partnership earned profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P60,000 on March 1, P40,000 on Sept. 30, and made drawings of P30,000 on Aug. 1 and P9,000 on Nov. 1. Requirement: Compute for the respective shares of the partners the profit.
9. The Articles of Partnership of partners A and B stipulates the following: Annual salary of P60,000 each. Bonus to Partner A of 20% of the profit after partners' salaries. The bonus and salaries are treated as expenses. Balance to be divided equally. The partnership earned profit of P360,000 after partners' salaries but before bonus. How much is the total share of A, including salary and bonus? a. 310,000 b. 250,000 c. 270,000 d. 210,000
A and B into partnership. As per Partnership Deed: (a) A to receive a Salary of $ 1,000 per month. (b) B to be allowed a commission of $ 1,000. (c) Interest on A's Loan to the firm, to be fixed at 12% p.a. (d) Rent of $ 4,000 is payable to B (e) Profit sharing ratio amongst A and B should be 1:1. A has given $ 10,000 to the firm as loan on 1.7.2014 and trading profits of the firm for the year 2014 was $ 32,500. Show the distribution of Profits
The partnership reports profits of P80,000, net of P20,000 salaries and P30,000 interest and a bonus. The bonus is computed as 20% of profits after salaries and interest. Compute the amount of the bonus. Show your solution. a. P16,000 b. P20,000 c. P26,000 d. P32,500