The profit allocation by A is:
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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.
A，B, C run a
A does not work in the business. As a result, B receives an annual salary of 78000, C receives 39000.
Alsom the partnership agrees to pay an interest of 10% of their capital balance. For any remaining profit after salary and interest, they will share based on their agreed fixed ratios.
A: Capital of 45000,
B: Capital of 50000, Profit and loss sharing:25%
C: Capital of 50000, Profit and loss sharing :55%
The profit for the year ended is 130000
The profit allocation by A is:
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- 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.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 $60,000.1. Say, Alittle and Prayer are partners in a furniture company. following profit and loss distributions; Their partnership agreement provides for the > Say, Alittle and Prayer are to receive salaries of P40,000, P36,000, and P13,650, respectively. Say is to receive a bonus equal to 10% of income before the bonus. Each partner is to receive 10% interest on the weighted average capital balance. Withdrawals are considered to be reduction of capital for purposes of interest calculations. > Any remaining profits of losses are to be divided equally among the partners. Capital balance information for 2006 is as follows: Alittle 6,000 Say 10,000 1,000 2,000 1,000 Prayer 40,000 2,000 15,000 Jan. 1, 2006 Withdrawal 4/1/06 Investment 7/1/06 Withdrawal 10/1/06 4,000 2,000 Prepare distribution of profit or loss table showing the required profit that will allow Say to withdraw P65,000 from said profit. 2. Ashe Company was organized on January 1, 2010, with authorized capital of 100,000 shares of…
- Show the solution in good accounting form Bruce, Parker and May formed a partnership. Their capital balances showed the following: Bruce, Capital P252,000; Parker, Capital P126,000; May, Capital- P42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20 percent of their interest to Violet for a total payment of P120,000 Violet will pay the money directly to the other partners. How much was the bonus debited or credited in partner Bruce's capital account?A and B formed a partnership. A and B agreed to share the partnership's profit as follows: A to receive P10,000 salary per month and 5% bonus before salary and bonus • Partners receive P50,000 each for the interest on their average capital. Remainder is to be divided equally ● If A's share in the partnership loss was P80,000 for the year. Compute the partnership income (loss). Encode as a negative amount if the answer is a loss.-Not what you’re looking for? Continue submitting your question. Submit your question Question i. Kijiko and Sahani is in partnership sharing profits and losses 3:2. ii. Under the terms of the partnership agreement, the partners are entitled to interest on capital at 5% per annum and Sahani is entitled to a salary of Kshs. 4,500. Interest is charged on drawings at 5% per annum depending on when the drawings were withdrawn and the amounts of interest on drawings are given below. No interest is charged or allowed on current accounts. The interests on drawings are: Kijiko kshs. 600 and Sahani Kshs. 750. iii. The partners’ capitals at 1 July 2018 were: Kijiko Kshs. 30,000 and Sahani Kshs. 10,000. iv. The net trading profit of the firm, before dealing with partners’ interest or Sahani salary for the year ended 30 June 2019 was Kshs. 25,800. At 1 July 2018, there was a credit balance of Kshs. 1,280 on Sahani current account, while Kijiko current account balance was a debit of Kshs.…
- 1. X, Y, and Z are partners who contributed P10,000 each to the capital of the partnership. D owes the partnership P30,000. Z collected from D P10,000 before X and Y could receive anything from D, who later became insolvent and therefore, they could not collect their shares. What is the obligation of Z? 2. A and B are capitalist partners while C is an industrial partner. Both A and B equally contributed P50,000. A contractual liability in favor of X was incurred in the amount of P150,000. After exhausting the partnership assets, there still exists a balance payable. From whom can X recover the balance? please help meA and B into partnership. As per Partnership Deed: (a) A to receive a Salary of $ 1,000 per month. (b) B to be allowed a commission of $ 1,000. (c) Interest on A's Loan to the firm, to be fixed at 12% p.a. (d) Rent of $ 4,000 is payable to B (e) Profit sharing ratio amongst A and B should be 1:1. A has given $ 10,000 to the firm as loan on 1.7.2014 and trading profits of the firm for the year 2014 was $ 32,500. Show the distribution of ProfitsQuestion 1. Vann and Jhane capital are P480000 and P520,000 respectively. Profit sharing ratio is 4:6. Tin invested P500,000 for a 30% interest in the partnership. What is the capital of Vann after admitting Tin? Question 2. In the AD partnership, Adam's capital is Php140,000 and David's is Php40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David2 to the partnership. David2 invests Php40,000 for a one-fifth interest in the total capital of Php220,000. What is the journal to record David's2 admission into the partnership? Question 3: In the AD partnership, Adam's capital is Php140,000 and David's is Php40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David2 to the partnership. David2 invests Php40,000 for a one-fifth interest in the total capital of Php220,000. What are the capital balances of David2 after being admitted into the partnership? Question 4: In the AD partnership, Adam's capital is Php140,000 and David's is…
- The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.The partnership of Ibrahim and Rawan has the following provisions: • Ibrahim and Rawan receive salary allowances of SAR 50,000 and SAR 15,000, respectively. • Interest is imputed at 5% on the average capital investment. • Any remaining profit or loss is shared between Ibrahim and Rawan in a 3:1 ratio, respectively. Average Capital investments: Ibrahim, SAR 300,000; Rawan, SAR 150, 000 ⚫ Net income SAR 300,000 Required: pass journal entry to allocate the profit between Ibrahim and Rawan (PLEASE DO NOT PUT SCREENSHOTS OR HAND WRITING)Requirement: Compute for the respective shares of the partners in 3. The partnership agreement of A and B stipulates the following: Annual salaries of P100,000 for A and P60,000 for B. 20% bonus to A, based on profit after salaries and bonus. Balance is shared equally. The partnership earned profit of P520,000 before salaries and bonus. Requirement: Compute for the respective shares of the partners in the profit. 4. A and B's partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared equally. During the period, the partnership earned profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P60,000 on March 1, P40,000 on Sept. 30, and made drawings of P30,000 on Aug. 1 and P9,000 on Nov. 1. Requirement: Compute for the respective shares of the partners the profit.