Dividing Profit or Loss: Allocated using Salaries, Interest Allowance, & Fixed Ratio Jackson and Thompson agree to share profit or losses as follows: 1. Annual salary allowances of $30,000 for Jackson and $10,000 for Thompson. 2. Interest allowances of 10% of beginning-of-year capital balance. 3. Remainder to be shared equally. Assume partnership profit for the year is $90,000 and Jackson and Thompson's beginning-of-year capital balances are $80,000 and $70,000 respectively.
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- Distribution of Profits or Losses Based on Partners' Agreement Pasia, Te, and Ocenar each receive a P70,000 salary, as well as 15% interest on their respective average investments of P200,000, P100,000, and P400,000. If they share remaining profits and losses in a 4:3:2 ratio, respectively, by how much would Ocenar account increase or decrease (indicate a decrease by placing parentheses), assuming: (a) profit of P405,000, (b) profit of P270,000, and (c) loss of P315,000. In addition, calculate (d) Ocenar share of a P350,000 profits if profit and loss distributions were based instead solely on the ratio of average capital investments.Kent Deriquito and Jude Searez are partners of Cebu Vintage Car. The Income and Expense. Summary account before final closing shows a credit balance of P450,000 at the end of the fiścal year. The following were taken from their respective çapital account ledgers: Kent Deriquito Balance 752,000 70,000 50,000 Jan. 1 Oct. 1 Withdrawal Dec. 1 Investment Jude Searez 680,000 80,000 10,000 40,000 Jan. 1 Balance March 1 Investment Nov. Withdrawal %3D Dec. InvestmentPartners H & I share profit and loss in an agreed ratio of 90/10. In the case of a net loss of $10,000, Partner I’s capital account would be: Select one: Would not be affected Credited for $1,000 Debited for $9,000 Debited for $1,000
- 2. A and B's partnership agreement provided for annual salary allowances of P160,000 for and P80,000 for B. Profits are shared equally, while losses on a 70;30 ratio. The partnership earned profit of P200,000. Requirement: Compute for the respective shares of the partners in the profit.Requirement: Compute for the respective shares of the partners in | shared equally, while losses on a 70:30 ratio. The partnership PROBLEM 3: EXERCISES 1. Partners A and B share in profits and los es on a 70:30 ratio after salaries of P80,000 for A and P40,000 or B. The business earned profit of P180,000 before deduction or the salaries. Requirements: a. Compute for the partners' respective share in the profit. b. Provide the journal entries (the salar are withdrawn periodically). for annual salary 2. A and B's partnership agreement provi allowances of P160,000 for A and P80, for B. Profits are earned profit of P200,000. Reguirement: Compute for the respective shares of the partners in the profit.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.
- Partners A and B have a profit and loss agreement with the following provisions: • Salaries of P30,000 and P45,000 for A and B, respectively; The interest of 10% on average capital balances of P50,000 and P65,000 for A and B, respectively. • One-fourth of any remaining profits are allocated to A and the ratio to B. If the partnership had a net income of 250,000, how much profit is allocated to Partner B? ●The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: Lambert and Yost Trial Balance December 31, 20Y3 Debit Balances Credit Balances Cash 34,000 Accounts Receivable 47,800 Supplies 2,000 Land 120,000 Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Tyler Lambert, Capital Tyler Lambert, Drawing Jayla Yost, Capital Jayla Yost, Drawing 157,500 67,200 63,600 21,700 27,900 5,100 135,000 50,000 88,000 60,000 Professional Fees 395,300 Salary Expense Depreciation Expense-Building 154,500 15,700 Property Tax Expense 12,000 Heating and Lighting Expense Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Expense 8,500 6,000 5,000 3,600 740,200 740,200 The balance in Yost's capital account includes an additional investment of $10,000 made on April 10, 2OY3. (Continued)Distribution of Profits or Losses Based on Partners' Agreement The partnership contract of Eje, Basilio and Dela Torre provided for the distribution of profit or loss in the following manner: 1. Bonus of 25% of profit before the bonus to Eje. 2. Interest at 15% on average capital account balances to each partner. 3. Residual profits or losses are divided equally. Profit of Eje, Basilio and Dela Torre for 2006 was P900,000, and the average capital account balances for the year were Eje, P1,000,000; Basilio, P2,000,000; and Dela Torre, P3,000,000. Required: Prepare the profit distribution schedule.
- Problem 1. Alucard and Chou organized their partnership on 01/01/19. The following entries were made into their capital accounts during 2019. Required: If partnership profits for the year equaled P66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions: Interest of 10% is allocated on weighted average capital balance and the remainder is divided equally. A salary of P9,000 will be allocated to Chou; 10% interest on ending capital is allocated to the partners; remainder is divided 60/40 to Alucard and Chou, respectively. Salaries are allocated to Alucard and Chou in the amount of P10,000 and P15,000, respectively and the remainder is allocated in the proportion to weighted average capital balances. A bonus of 10% of partnership profits after bonus is credited to Alucard, a salary of P35,000 is allocated to Chou, a P20,000 salary is allocated to Alucard, 10% interest on weighted capital is allocated, and remainder is…Problem #5 SCORE: PROFESSOR: Distribution of Profits or Losses Based on Partners' Agreement Abad, Aglugub, and Onate agreed to share profits and losses according to the ratio of their respective investments at the beginning of the year of P300,000, P250,000, and P450,000. Calculate the share of each partner under the following conditions: (a) P270,000 profit; (b) P240,000 loss.Assume the partnership income-sharing agreement calls for income to be divided with a salary of $41,000 to Coburn and $36,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Income Summary Coburn, Capital Webb, Capital Debit 68000 Credit 33850 32150