Distribution of Profits and Losses: 1. The ABC partnership provided for the following distribution of profits and losses: • Amaya and Bolano each are to receive 5% of the net profits up to P1,500,000 and 20% on the amount in excess thereof; • Caballero is to receive 80% in excess of P1,000,000 of the remaining profit after deducting Amaya and Bolano’s share as per above. • The balance is to be divided 4:2:4 respectively among the partners. • Profit is P2,750,000 REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or loss
ASSIGNMENT 07
Distribution of Profits and Losses:
1. The ABC
• Amaya and Bolano each are to receive 5% of the net profits up to P1,500,000
and 20% on the amount in excess thereof;
• Caballero is to receive 80% in excess of P1,000,000 of the remaining profit
after deducting Amaya and Bolano’s share as per above.
• The balance is to be divided 4:2:4 respectively among the partners.
• Profit is P2,750,000
REQUIRED: Prepare the following:
A. Profit or Loss Distribution Table
B. Corresponding
2. Rene, Michael, and Kevin are partners in an accounting firm. Their capital account
balance at year-end were Rene, P90,000; Michael, P120,000; and Kevin,
P160,000. They share profit and losses on a 4:4:2 ratio after considering the
following terms:
a. Kevin is to receive a bonus of 10% of net income.
b. Interest of 5% shall be paid on partner’s capital.
c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevin
respectively.
Assuming a net income of P84,000 for the year.
REQUIRED: Prepare the following:
A. Profit or Loss Distribution Table
B. Corresponding JOURNAL ENTRY to distribute profit or loss
3. Bunag, Belen, and Bustos are partners in an accounting firm. Their capital account
balances at year-end were P180,000, P220,000, and P100,000, respectively.
They share profits and losses on a 4:4:2, ratio respectively, after considering the following terms:
a. Bustos is to receive a bonus of 10% of profit after deducting bonus
b. Interest of 10% shall be paid on that portion of a partner’s capital in excess
of P200,000.
c. Salaries of P20,000 and P24,000 shall be paid to partners Bunag and Bustos,
respectively.
Assuming a profit of P220,000 for the year.
REQUIRED: Prepare the following:
A. Profit or Loss Distribution Table
B. Corresponding JOURNAL ENTRY to distribute profit or loss
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