FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The
-Jones, the managing partner, received a bonus equal to 20 percent of the business's profit,
-Each Partner receives 10 percent interest on average capital investment
-Any residual profit or loss divided equally
The average investments for 2018 were as follows:
Jones 135,000
King 270,000
Lane 405,000
How much of the $60,000 partnership profit for 2018 should be assigned to each partner.
Jones____________
King___________
Lane__________________
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- HRM Partnership begins its first year of operations with the following capital balances A, capital P32,000 C, capital 16,000 According to the partnership agreement, all profits will be distributed as follows • A monthly salary of P 3,200 and P 1,600 to A & C respectively. • The partners will be allowed with interest equal to 10% of the capital balances of the first day of the year. A bonus of 10% of the net income after bonus to A. • The remainder will be divided on the basis of the beginning capital for the first year and equally for the second year Each partner is allowed to withdraw up to P 1,600 a year. Assume that the net loss for the first year of operations ions is P2,400 with net income of P 8,800 in the following year. Assume further that each partner withdraws the maximum amount from the business each period. The capital balances of A at the end of the second year is The capital balances of B at the end of the second year isarrow_forwardThe partnership agreement between Partners Paul, John, George and Ringo were as follows: a. All partners receive a 10% interest on their beginning capital balances as follows: Paul – 1,200,000, John – 1,050,000, George – 1,550,000, and Ringo – 1,800,000, b. Partners Paul and Ringo both receives annual salary of P480,000 and P300,000 respectively c. Any remaining profits or loss are to be divided according to their capital ratio, d. Net profit for the year amounted to 450,000 How much is the share in the partnership income did Ringo received? How much is the share in the partnership income did John received? How much is the share in the partnership income did George received? How much is the share in the partnership income did Paul received?arrow_forwardThe partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix, the managing partner, receives a salary allowance of $108,000, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Alix $600,000, Gise $1,200,000, and Bosco $1,800,000. If partnership net income is $540,000, the amount allocated to Alix should be a. $90,000. Ch10,11,12 Principles of Accounting I b. $162,000. c. $180,000. d. $198,000.arrow_forward
- Aarush, Advik and Azad are partners. The partnership agreement provides that partners will receive interest of 8% of their average capital balance and a salary allowance as follows: $50,000 $40,000 $40,000 Aarush Advik Azad Aarush, who manages the business, will receive a bonus of 25% of the profit in excess of $90 000 after partners interest and salary allowances have been deducted. Residual profits will be divided: Aarush (half) Advik (one third) Azad (one sixth) During the current year their average capital balances were as follows: $250,000 $150,000 $90,000 Aarush Advik Azad Required Prepare a schedule showing how profit will be divided among the three partners if the profit for the year before the adjustments is $320 000.arrow_forwardThe partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. Each partner receives 18 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2018 for 2018 were as follows: Jones $250,000 King $350,000 Lane $525,000 How much of the $78,000 partnership profit for 2018 should be assigned to each partner?arrow_forwardThe partnership agreement of AAA, BBB and CCC provides for the year-end allocation of net income in the following order: • First, AAA is to receive 10% of net income up to P100,000 and 20% over P100,000 Second, BBB and CCC each are to receive 5% of the remaining income over P150,000 • The balance of income is to be allocated equally among the three partners The partnership's 2009 net income was P250,000 before any allocations to partners. What amount should be allocated to BBB?arrow_forward
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