Del Mundo, Ballada and Mendoza are partners sharing profit on a 7:2:1 ratio. Burgos was admitted into the partnership with the 15% share in profit on Jan. 1, 2019. The old partners continue to share profit in their original ratios. For the year 2019, the partnership showed a profit of P15,000. However, it was discovered that the following items were omitted in the firm’s books. Unrecorded year-end: 2018 2019 Accrued Expense P1,050 Accrued Income 875 Prepaid Expense P1,400 Unearned Income 1,255 The share of Ballada in the 2019 profit is a. P2,197.50 b. P2,637.00 c. P2,490.50 d. P3,149.75
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.
Del Mundo, Ballada and Mendoza are partners sharing profit on a 7:2:1 ratio. Burgos was admitted into
the
their original ratios.
For the year 2019, the partnership showed a profit of P15,000. However, it was discovered that the
following items were omitted in the firm’s books.
Unrecorded year-end: 2018 2019
Accrued Expense P1,050
Accrued Income 875
Prepaid Expense P1,400
Unearned Income 1,255
The share of Ballada in the 2019 profit is
a. P2,197.50
b. P2,637.00
c. P2,490.50
d. P3,149.75
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