Answered: What are the partnership's earnings for…

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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Marco, a partner in the Marco and Guel partnership, is entitled to 40% of the profits and losses. During 2015, Marco contributes land to the partnership that cost her P50,000 but has a current value of P60,000. Also during 2015, Marco has drawings of P80,000. The balance in Marco's capital account was P120,000 at the beginning of the year and is P150,000 at the end of the year. What are the partnership's earnings for 2015?

A. ( 75,000)

B. ( 50,000)

C. 150,000

D. 125,000

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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