Left and Right are partners. Their capital accounts during 2020 were as follows: Left, Capital 8/23 P6,000 1/1 4/3 10/31 Right, Capital 3/5 P9,000 1/1 7/6 | 10/7 PS0,000 7,000 5,000 P30,000 8,000 6,000 Partnership net income is P50,000 for the year. The partuership agroemeut provides for the division of net income as follows: Each partner is credited 10 percent interest on his or her average capital. • Because of prior work experience, left is entitled to an anımal salary of P12,000 an Right is credited with P8,000. • Any remainder income or loss is to be allocated based on beginning capital. How much of the partnership net income for 2020 should be assigned to Left and Right?
Left and Right are partners. Their capital accounts during 2020 were as follows: Left, Capital 8/23 P6,000 1/1 4/3 10/31 Right, Capital 3/5 P9,000 1/1 7/6 | 10/7 PS0,000 7,000 5,000 P30,000 8,000 6,000 Partnership net income is P50,000 for the year. The partuership agroemeut provides for the division of net income as follows: Each partner is credited 10 percent interest on his or her average capital. • Because of prior work experience, left is entitled to an anımal salary of P12,000 an Right is credited with P8,000. • Any remainder income or loss is to be allocated based on beginning capital. How much of the partnership net income for 2020 should be assigned to Left and Right?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A. Left, P18,750; Right; P31,250
B. Left, P23,667; Right; P26,333
C. Left, P25,000; Right; P25,000
D. Left, P26,388; Right; P23,612
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education