erate as a partnership. Their agreement includes the following: ● Rian will receive a salary of P20,000 and a bonus of 3% of income after all the bonuses ● Lance will receive a salary of P10,000 and a bonus of 2% of income after all the bonuses ● All the partners are to receive the following: Rian - P5,000; Lance P4,500; Weng - P2,000; and Sidd - P4,700, representing 10% interest on their average capital balances. ● Any remaining profits are to be divided equally among the partners Partnership reports a profit of P40,000 ● w much is Lance's share in the profit if profit is distributed in the following er of priority: Interest on invested capital, then bonuses, then salary, and a according to profit and loss percentage?

erate as a partnership. Their agreement includes the following: ● Rian will receive a salary of P20,000 and a bonus of 3% of income after all the bonuses ● Lance will receive a salary of P10,000 and a bonus of 2% of income after all the bonuses ● All the partners are to receive the following: Rian - P5,000; Lance P4,500; Weng - P2,000; and Sidd - P4,700, representing 10% interest on their average capital balances. ● Any remaining profits are to be divided equally among the partners Partnership reports a profit of P40,000 ● w much is Lance's share in the profit if profit is distributed in the following er of priority: Interest on invested capital, then bonuses, then salary, and a according to profit and loss percentage?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 2PA: Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances...

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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…
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