XYZ partnership formed its partnership on June 1, 20x1 with the following capital balances: A, capital60,000B, capital80,000C, capital100,000 The partners agreed that profits and losses be distributed as follows:Each partner is allocated an interest of 10% based on beginning capitalSalary allowance to B of P20,000 per year.Any remaining profits and losses are allocated on a 3:3:4 ratio, respectivelyEach partner withdraw P5,000 Assuming the net income is P50,000. What is the capital balance of C at the end of the year?The Answer is (110567). I just need the computation

A interest on capital = P60,000 x10%x7/12 = P3,500 B interest on…

Answered: XYZ partnership formed its partnership…

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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XYZ partnership formed its partnership on June 1, 20x1 with the following capital balances:

A, capital	60,000
B, capital	80,000
C, capital	100,000

The partners agreed that profits and losses be distributed as follows:

Each partner is allocated an interest of 10% based on beginning capital
Salary allowance to B of P20,000 per year.
Any remaining profits and losses are allocated on a 3:3:4 ratio, respectively
Each partner withdraw P5,000

Assuming the net income is P50,000. What is the capital balance of C at the end of the year?

The Answer is (110567). I just need the computation

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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