Partners Adan and Eba have capital balances of Paradise partnership of P400,000 and P600,000, respectively. They agree to share profits and losses as follows: Adan Eba As salaries P100,000 P120,000 As interest on capital at the beginning of the year 10% 10% Remaining profits or losses 50% 50% Based on the information above, answer the following: If income for the year was P300,000, what will be the distribution of income to Adan? If net loss for the year was P20,000, what will be the distribution to Eba?

Partners Adan and Eba have capital balances of Paradise partnership of P400,000 and P600,000, respectively. They agree to share profits and losses as follows: Adan Eba As salaries P100,000 P120,000 As interest on capital at the beginning of the year 10% 10% Remaining profits or losses 50% 50% Based on the information above, answer the following: If income for the year was P300,000, what will be the distribution of income to Adan? If net loss for the year was P20,000, what will be the distribution to Eba?

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.
The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
For the year 2021, the partnership of AMMAR and BANU realized a net profit of P240,000. The capital accounts of the partners show the following postings: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 AMMAR Debit Credit Debit Credit 20,000 10,000 120,000 BANU 10,000 10,000 5,000 80,000 20,000 Question 5 If the profits are to be divided based on average capital, how much will be the share of AMMAR?
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