FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question

On January 1, 2020, Mike, Jay and Bong organized MJB partnership by investing P5M, 2M and P3M for capital interest ratio of 4:5:1 respectively. Bong has been appointed as managing partner. During year 2020, MJB partnership reported net income of P3,000,000. Their profit/loss distribution and drawing agreement are presented below:

  1. 20% interest on beginning capital
  2. P10,000, P20,000 and P50,000 monthly salary, respectively
  3. 25% bonus of net income after interest and salary to managing partner
  4. The remainder will be divided equally among the partners.
  5. The partners must withdraw at the end of the year 50% of their share in net income for the period.

What is the capital balance of Bong on December 31, 2020?

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