A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C wa
A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C wa
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7. A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share
- Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000.
- Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively.
- Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus.
Assuming a net income of P60,000 for the year, the total profit share of partner C was:
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