You were presented the below transactions for the partners' capital accounts:Jasper, CapitalElena, CapitalDaisy, CapitalDr.Cr.DrCr.Dr.Cr.1-Mar46 5,000429,600899,3001-Apr5,0008,0001-Jun10,00020,0001-Aug10,0006,0001-Sep3,0001-Oct5,0001,00010,0001-Dec4,0005,00050,000The partnership agreement for P/L division includes the following:Jasper and Elena receive an annual salary of P20,000 and P10,000,respectively. • Elena receives a bonus of 3% of net income before taxes butafter bonus.Daisy receives a bonus of 2% of net income before taxes but after bonus.All partners are to receive a 10% interest on their average capitalbalances. • Remainder is divided equally.RewThe company incur 88,415 loss for thecurrent year operation. Prepare an incomestatement of the partnership with scheduleshowing distribution of profits.

Here discuss about the distribution of profit and other in between the partners like salary, capital…

Answered: The company incur 88,415 loss for the…

The company incur 88,415 loss for the current year operation. Prepare an income statement of the partnership with schedule showing distribution of profits.

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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Concept explainers

Partnership Accounting

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

Partner Admission and Withdrawal

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.

Question

You were presented the below transactions for the partners' capital accounts:
Jasper, Capital
Elena, Capital
Daisy, Capital
Dr.
Cr.
Dr
Cr.
Dr.
Cr.
1-Mar
46 5,000
429,600
899,300
1-Apr
5,000
8,000
1-Jun
10,000
20,000
1-Aug
10,000
6,000
1-Sep
3,000
1-Oct
5,000
1,000
10,000
1-Dec
4,000
5,000
50,000
The partnership agreement for P/L division includes the following:
Jasper and Elena receive an annual salary of P20,000 and P10,000,
respectively. • Elena receives a bonus of 3% of net income before taxes but
after bonus.
Daisy receives a bonus of 2% of net income before taxes but after bonus.
All partners are to receive a 10% interest on their average capital
balances. • Remainder is divided equally.
Rew
The company incur 88,415 loss for the
current year operation. Prepare an income
statement of the partnership with schedule
showing distribution of profits.

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